Yesterday's session brought UK Services PMI data. The current period of rising UK service sector output was extended to over three years in January, as signalled by the Business Activity Index remaining above the no-change mark of 50.0. The index was little-changed from December’s 55.5, at 55.6, and broadly in line with the average over the second half of 2015. Growth in January was slightly stronger than the long-run survey average, but weaker than the strength achieved in 2013 (56.9), 2014 (58.2) and 2015 (56.7).
In the US session ADP job figures and Non-Manufacturing PMI data was released.
Private sector employment increased by 205,000 jobs from December to January according to the January ADP National Employment Report. Analysts were forecasting increase by 193,000. "One of the main reasons for lower overall employment gains in January was the drop off in jobs added at the largest companies compared to December. These businesses are more sensitive to current economic conditions than small and mid-sized companies,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Over the past year, businesses with less than 500 employees have created nearly 80 percent of new jobs.”
The NMI registered 53.5 percent in January, 2.3 percentage points lower than the seasonally adjusted December reading of 55.8 percent. This represents continued growth in the non-manufacturing sector at a slower rate. According to the NMI, 10 non-manufacturing industries reported growth in January. The majority of the respondents’ comments are positive about business conditions; however, there is a concern that exists relative to global conditions, stock market volatility, and the effect on commercial and consumer confidence.
Focus of tomorrow's session will be on BoE interest rate decision and the following minutes. Though, no change in interest rates is expected, following Minutes should bring a lot of volatility to the markets. In the US session Unemployment Claims figures are scheduled for a release. No significant change is expected.
Figures to watch:
Official Bank Rate/Asset Purchase Facility (Thursday 13:00)
Unemployment Claims (Thursday 14:30)
