Purchasing managers in the UK and Eurozone disappoints

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The first of the month signals the start of the monthly purchasing managers indices (PMI's) for different sectors of the economy, with yesterday seeing the manufacturing PMI's doing no favours to anyone on this side of the Atlantic. They were all lower on the month with only Germany at 50.9 and Switzerland at 51.7 still in the growth zone above 50. The UK and Eurozone were down at 49.0, both of them lower than expectations. The surprise winner was the US despite the figure being down on the month from 50.9 to 50.6, the figure was still in expansion territory above 50, which sent the US Dollar higher.

The Euro on the other hand started off heading lower on the currency exchange markets yesterday for no real reason. Nationwide's bleak house price report was a reason not to buy Sterling but despite this Sterling went up half a cent during the morning session against the Euro is still there or thereabouts this morning.

Perhaps uncertainty about the Greek Finance Minister's unscheduled press conference today unnerved the market yesterday or maybe it was the Spanish parliaments vote on an amendment to the constitution to set a maximum level for government borrowing. Either way, the Euro didn't have a great start to yesterday.

At this point, it is worth pointing out that Japan's Ministry of Finance spent ¥4.5 billion (£36 billion) to depress the value of the Yen on the 4th August. The action knocked three Yen off the currency's value in nine hours but less than a week later it was right back where it started. 

Today's data covers UK construction PMI and Eurozone producer prices. More importantly there is the US non-farm payrolls figure which is expected to have gone up by around 70,000 in August. An increase of that size would only be half the number needed to keep pace with demographics which would keep the unemployment rate steady at 9.1%.