The UK PMI construction sector index edged higher to 51.1 for April from 50.7 the previous week and slightly above consensus forecasts of 50.9. there was a sharp easing of supply constraints in the sector and prices increased at the slowest rate since November 2020. Sterling maintained a firm overall tone on Friday and, after a dip against the dollar after the US employment data, the UK currency recovered strongly. BRC data recorded like-for-like retail sales growth of 5.2% for April from 4.9% previously which continued to imply declining volumes. Sterling held amid expectations of another Bank of England rate hike this week.
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The Euro-Zone Sentix investor confidence index dipped again to -13.1 for May from -8.7 previously and below expectations of -8.0. the expectations index also dipped to the lowest level since December 2022. ECB chief economist Lane stated that there is still a lot of momentum and inflation.
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US non-farm payrolls increased 253,000 for April compared with expectations of a round 180,000, although there was a downward revision for March to 165,000 from the original 236,000. There were small increases in manufacturing and construction jobs with a net decline for wholesale trade and temporary help categories. According to the household survey, the unemployment rate edged lower to 3.4% from 3.5% and below market expectations of 3.6%. The participation rate was unchanged at 62.6% and there was a smaller employment increase of 139,000 with an increase of over 200,000 in those not in the labour force. Average hourly earnings increased 0.5% compared with expectations of 0.3% with a year-on-year increase of 4.4% from 4.3% and above expectations of 4.2%. The dollar was unable to hold the gains with sentiment dampened by the downward revision to March’s payrolls increase. There were also still expectations that the Federal Reserve would move to cut interest rates later this year.
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