Though the UK figure saw a slight, expected, dip month-on-month to 55.9, both the FTSE and pound were seemingly reassured by the reading. The UK index continued to tickle 7150 after rising 40 points, while sterling shook off its early losses to take another 0.4% off both the dollar and the euro.
However, tucked inside the UK’s superficially positive manufacturing PMI was a few things for investors to fret over going forwards. Raw material costs jumped to 88.3, the highest since the survey began in 1992, thanks to the weakened pound and rising energy prices; and while the jump in the output prices index was far lower than its input peer, it appears to be only a matter of time before the former begins to match the sharp increases of the latter.
Over in the Eurozone the morning’s data was less caveat-laden, with the region-wide manufacturing figure coming in a smidge better than expected at 55.2. That’s the best reading in nearly 6 years, helping send the DAX and CAC 0.7% and 0.9% higher respectively.
Looking ahead to this afternoon and there is morning manufacturing data on offer, with the US PMIs. The Markit reading is set to be confirmed at 55.1, up from 54.3 the month previous, while the ISM number is expected to jump from 54.7 to 55.0. There is also a preview of Friday’s jobs report in the form of the ADP non-farm employment change reading, forecast to come in at 165k. Currently the futures are suggesting the Dow Jones will just about re-cross 19900 with a 40 point rise after the bell, though given that this evening sees the latest Federal Reserve meeting there things could become a bit jittery as the day goes on.