Sterling bounced back from a six-week low against the US Dollar yesterday following the UK PMI construction figures, with the construction data pushing to an 8-month high and above initial expectations. However, the headline figure was below the reading of 50 which is the level that defines expansion and contraction. In addition, business confidence strengthened to an 18-month high as political uncertainty eased. In the US, factory orders increased by 1.8% above the expectations of 1.2% with business conditions also increasing.
Today, the second reading of the PMI services sector is set for release, although no change is expected if we do see a revision, sterling will likely react as this is the dominate sector in the nation.
President Trump Delivers his 'State of the Union' Speech
Overnight, President Trump delivered his annual “State of the Union” speech. The market was watching his speech for clues on where he will be fighting the election later this year. It was no surprise that he focused on the economy hailing the "great American comeback". President Trump stated, "we are moving forward at a pace that was unimaginable just a short time ago, and we are never going back!". The animosity between Democratic House Speaker Nancy Pelosi was evident with her ripping up a copy of his speech behind him. The market will today wait for the verdict on corruption charges in his impeachment trial; it is expected that he will be acquitted.
Today, the ADP employment report and the ISM non-manufacturing report are due out for release. The ADP will be closely monitored ahead of the official labour numbers on Friday.