5 Jan 2016
Eurozone inflation confirms downside risks while UK construction PMI surges - TDS
FXStreet (Delhi) – Research Team at TDS, notes that the Euro area inflation confirmed their fear of downside risks, with annual inflation remaining unchanged in December at 0.2% y/y, versus market expectations of 0.3% y/y.
Key Quotes
“Core inflation also remained unchanged vs November, at 0.9% y/y, suggesting that the downward surprise wasn’t due to energy prices. In fact, month-on-month (seasonally adjusted) core inflation registered growth of just 0.01%, and has fallen in two of the past four months, showing that underlying price pressures remain very weak in the euro area.
UK: December’s construction PMI increased to 57.8 in December, following a reading of 55.3 in November. This reverses much of last month’s decline, putting the index back closer to its recent levels. New business helped boost the index this month, in turn supporting employment growth. With continued quality issues with the ONS’s official measure of construction output, the PMI construction series tends to be a better indicator of true construction activity in the UK economy, and December’s reading suggests the risk of a slowdown in activity in the sector from the prior month’s numbers is now greatly reduced.”
Key Quotes
“Core inflation also remained unchanged vs November, at 0.9% y/y, suggesting that the downward surprise wasn’t due to energy prices. In fact, month-on-month (seasonally adjusted) core inflation registered growth of just 0.01%, and has fallen in two of the past four months, showing that underlying price pressures remain very weak in the euro area.
UK: December’s construction PMI increased to 57.8 in December, following a reading of 55.3 in November. This reverses much of last month’s decline, putting the index back closer to its recent levels. New business helped boost the index this month, in turn supporting employment growth. With continued quality issues with the ONS’s official measure of construction output, the PMI construction series tends to be a better indicator of true construction activity in the UK economy, and December’s reading suggests the risk of a slowdown in activity in the sector from the prior month’s numbers is now greatly reduced.”