1:22 PM
alphaadvisory
Monday is a light day for major economic reports, although
today's updates on EU producer prices and factory orders in the US could
move markets if they bring major surprises. Meantime, let us focus on
three additional reports scheduled for release today. The numbers will
add a bit more macro perspective on the kick-off in the new year via
investor confidence in Europe, construction activity in the UK, and the
broadly defined employment trend in the US.
EU Sentix Investor Confidence (09:30 GMT) The macro mood in Europe continues to improve, according to last week's January update of the EU Commission's Economic Sentiment Index. That has also been the trend in recent months for the Sentix Investor Confidence Index, which climbed sharply in the January reading. Today's release from the German consultancy is expected to show more improvement, which would mark the sixth straight monthly gain.
The Sentix Investor Confidence Index reached -7.0 in the previous report, up from -16.8 in December. Negative values indicate a gloomy mood overall, although the pessimism appears to be fading and analysts expect that we will see this benchmark move closer to the neutral zero level in today's release. That is hardly a radical outlook, given the recent rise in equity prices across the Continent. Most major equity market indexes in Europe climbed in January, which implies another gain for the Sentix index is likely.
UK Construction PMI (09:30 GMT) The construction sector in Britain has been struggling in recent months, and analysts do not expect a change in the big picture for today's update. In the December report, the Markit/CIPS UK Construction Purchasing Managers Index (PMI) remained under a neutral 50 level for the second month. The weakness was led by a slumping housing sector, according to the January 3 press release (pdf) from Markit Economics. “December rounded off a miserable year for the UK construction sector, with output declining at the steepest pace for six months and new business intakes falling back at the fastest rate since April 2009," noted Markit senior economist Tim Moore.
Some analysts see a bit of improvement for January, albeit without breaching the 50-level ceiling. Yet the potential for something better can not be ruled out in the wake of last week's relatively upbeat report on the British manufacturing sector, which continued to expand last month. The Markit/CIPS UK Manufacturing PMI reflected a second month of growth through January. Modestly improving business conditions in manufacturing do not necessarily translate to progress for construction, at least not quickly. But a moderately brighter climate in the industrial sector suggests that the economy has found a floor. In turn, that may lend support to the construction sector in terms of today's update.
US Employment Trends Index (15:00 GMT) Friday's payrolls report for January reflected another month of modest growth in the labour market. Today's number from the Conference Board will provide additional perspective on the employment profile in the first month of 2013.
The Employment Trends Index (ETI) is a statistical summary of eight labour market indicators. Aggregating these benchmarks offers a clearer view of the employment trend, according to the Conference Board. By that reasoning, the three months through December show a consistently improving trend, with ETI rising to a new high of just over 109. The rise in payrolls last month, along with a decline in initial jobless claims in January versus December, suggest that the today's ETI level will edge higher still.
EU Sentix Investor Confidence (09:30 GMT) The macro mood in Europe continues to improve, according to last week's January update of the EU Commission's Economic Sentiment Index. That has also been the trend in recent months for the Sentix Investor Confidence Index, which climbed sharply in the January reading. Today's release from the German consultancy is expected to show more improvement, which would mark the sixth straight monthly gain.
The Sentix Investor Confidence Index reached -7.0 in the previous report, up from -16.8 in December. Negative values indicate a gloomy mood overall, although the pessimism appears to be fading and analysts expect that we will see this benchmark move closer to the neutral zero level in today's release. That is hardly a radical outlook, given the recent rise in equity prices across the Continent. Most major equity market indexes in Europe climbed in January, which implies another gain for the Sentix index is likely.
UK Construction PMI (09:30 GMT) The construction sector in Britain has been struggling in recent months, and analysts do not expect a change in the big picture for today's update. In the December report, the Markit/CIPS UK Construction Purchasing Managers Index (PMI) remained under a neutral 50 level for the second month. The weakness was led by a slumping housing sector, according to the January 3 press release (pdf) from Markit Economics. “December rounded off a miserable year for the UK construction sector, with output declining at the steepest pace for six months and new business intakes falling back at the fastest rate since April 2009," noted Markit senior economist Tim Moore.
Some analysts see a bit of improvement for January, albeit without breaching the 50-level ceiling. Yet the potential for something better can not be ruled out in the wake of last week's relatively upbeat report on the British manufacturing sector, which continued to expand last month. The Markit/CIPS UK Manufacturing PMI reflected a second month of growth through January. Modestly improving business conditions in manufacturing do not necessarily translate to progress for construction, at least not quickly. But a moderately brighter climate in the industrial sector suggests that the economy has found a floor. In turn, that may lend support to the construction sector in terms of today's update.
US Employment Trends Index (15:00 GMT) Friday's payrolls report for January reflected another month of modest growth in the labour market. Today's number from the Conference Board will provide additional perspective on the employment profile in the first month of 2013.
The Employment Trends Index (ETI) is a statistical summary of eight labour market indicators. Aggregating these benchmarks offers a clearer view of the employment trend, according to the Conference Board. By that reasoning, the three months through December show a consistently improving trend, with ETI rising to a new high of just over 109. The rise in payrolls last month, along with a decline in initial jobless claims in January versus December, suggest that the today's ETI level will edge higher still.
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