Brexit continues to be the word of the day, with the markets somewhat caught between the future consequences of Britain’s separation from the EU and the lack of discernible impact in the past few months.
Monday morning saw yet another positive manufacturing PMI surprise for the UK, with September’s survey jumping to 55.4 from 53.4 the month before, the highest reading in nearly a year. This helped fuelled the FTSE’s rise, the index up just shy of 90 points and only 15 away from hitting the magic 7000 mark. The pound briefly saw its decline tempered by the manufacturing figure, however quick enough sterling reverted to its earlier losses, the currency down 0.8% against both the dollar and euro. While the FTSE is celebrating the UK’s recent, and unexpected, economic sturdiness, the pound has its eye on a time when Britain officially no longer belongs to the European Union.
The German Unity Day-inspired quietness in the Eurozone didn’t prevent investors from getting a glimpse of the region’s manufacturing sector this morning. With Spain, Italy and France all coming in ahead of expectations and Germany’s final reading unchanged at 54.3 the Eurozone-wide figure arrived as forecast at 52.6, an increase on 51.7 the month before.
Looking ahead to the US open and, like the Eurozone, the Dow Jones’ performance this Monday is likely to be hampered by the Brexit-boosted strength of the dollar. The Dow futures are pointing to a 20 point increase after the bell, a rise that leaves the index just over the 18300 mark. In terms of data like the rest of the West the US reveals its latest manufacturing PMIs this afternoon; the Markit figure is forecast to be confirmed at 51.4 from 52.0 the month before, while the ISM reading is set to jump back out of contraction territory to 50.4.