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Record lows continue across the board

Record lows continue across the board



The UK PMI manufacturing index declined to 32.9 for April from 47.8 previously. The services-sector index slumped to 12.3 from 34.5 with both figures at record lows. New orders fell with over 80% of service-sector companies reporting a decline in activity whilst March retail sales registering a record 5.1% monthly fall this morning. There was also the fastest rate of decline in prices for over 20 years, reinforcing expectations that inflation would decline sharply in the short term. With government borrowing set to increase rapidly, the Treasury announced £180bn in gilt sales over the next 3 months.

Bank of England MPC member Vlieghe stated that the economy was unlikely to recover quickly. Consumer confidence was unchanged at a record low of -34 for April with Sterling drifting lower to trade below 1.2315 against the Dollar but slowly rising against the Euro to trade around the 1.1470 level. 



US initial jobless claims declined to 4.43mn from a revised 5.24mn the previous week while the insured unemployment rate increased to a record high of 11.2%. Claims have totalled over 26.0mn in the past few weeks, maintaining expectations of a jump in unemployment and slump in payrolls in next week’s jobs report.

According to flash data, the April PMI manufacturing index declined to an 11-year low of 36.9 from 48.5 previously while the services-sector index slumped to a record low of 27.0 from 39.8. The dollar failed to secure further gains and the Euro gained significant relief following comments from German Chancellor Merkel that the Euro-zone needed to provide huge support to economies.



The German manufacturing PMI index declined to 34.4 from the previous month while the services-sector index slumped to 15.9 from 31.7 previously with a steeper downturn in France, especially for services. The Euro-zone manufacturing index dipped to an 11-year low of 33.6 from 44.5 with the services index at a record low of 11.7 from 26.4. Additionally, German confidence index also dramatically fell to -23.4 from 2.7 previously.

The Euro was subjected to renewed selling after the data with a retreat to 4-week lows near 1.0750 against the Dollar and as of writing the common currency trades around the 1.0740 mark. 


Data to watch

07.00 GBP – Retail Sales

09.00 EUR – German ifo Business Climate

13.30 USD – Core Durable Goods Orders

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