As per GfK, UK consumer confidence improved to -1.0 in September from -7.0 in August, beating the market forecast of -5.0.

Ratings agency Standard & Poor’s (S&P) said that Britain and the Eurozone would avert a recession, but witness slower economic growth after Brexit. S&P expects Britain to grow at 1.8% in 2016, and slow to 1.0% in 2017 and 1.1% in 2018. Furthermore, it stated that exports and the housing market would impact the economy’s long-term response to the Brexit vote.

The World Trade Organization (WTO) cut global trade growth forecast to 1.7% for 2016 from 2.8% projected in April 2016; this would be the slowest pace of trade and output growth since the 2009 financial crisis. Global trade is set to grow at a slower rate than global GDP for the first time in 15 years. Moreover, the WTO lowered trade growth forecast to 1.8–3.1% for 2017 from 3.6%.

According to the British Bankers’ Association, the number of mortgages approved for house purchases in the UK declined to 36,997 in August 2016 from 37,672 in July 2016, registering the lowest level since January 2015. The level indicate an extended slowdown, which commenced at the start of 2016 ahead of a new levy on homes bought by landlords in April 2016 and Brexit in June 2016.

As per Markit, the Eurozone’s services PMI contracted to 52.1 in September from 52.8 in August, marking the lowest reading in 21 months. Conversely, the flash composite output index fell to 52.6 in September from 52.9 in August.

As per the Confederation for British Industry, the total order balance in the UK remained at -5.0 in September, well above the long-run average of -15.0, in line with market expectations. The output forecast for the next three months reached a three-month high. Conversely, growth in export orders eased marginally from the two-year high in August.

The Open Market Committee of the US Federal Reserve voted 7–3 to keep interest rates unchanged at 0.25–0.50%. Although the US Federal Reserve expressed confidence in economic growth, it believed that it was not enough to raise increase rates. However, it hinted at the possibility of a rate hike later this year.

The BOJ informed that it would start targeting 10-year interest rates, to keep them around zero as part of a new policy framework aimed at strengthening inflation. The BOJ would continue its quantitative easing until inflation exceeds 2%. Meanwhile, the bank kept its deposit rate unchanged at -0.1%.

As per preliminary data from Eurostat, construction output in the Eurozone increased 3.1% y-o-y in July, after growth of 0.6% in June, marking the strongest performance since February 2016. Growth was led by a rise of 3.2% in building construction and 2.9% in civil engineering. On an m-o-m basis, the construction output expanded 1.8% in July, following a 0.3% increase in June.

As per property tracking website Rightmove, the average asking price of houses in the UK increased 0.7% m-o-m in September to £306,499 after a 1.2% drop in August. On a y-o-y basis, house prices expanded 4.0%, following a 4.1% rise in the previous month. This sharp increase in prices is partially due to a surge in buy-to-let investors, which snapped up properties before the 3% rise in stamp duty in April.

Bank of England (BoE)’s Monetary Policy Committee voted unanimously to keep the bank rate at 0.25%, government bond purchases at £435bn, and corporate bond purchases at £10bn. BoE increased its growth forecast to 0.3% q-o-q from the previous estimate of 0.1%. It also expects inflation to reach the 2% target in the first half of 2017.

As per the Office for National Statistics, the UK’s unemployment rate remained at 4.9% in the three months to July, its lowest level since 2005 and in line with market expectations. The number of employed people rose by 174,000, taking the employment rate to 74.5%. These numbers show that the Brexit vote has not yet impacted the labour market.

As per the Office for National Statistics, the UK’s consumer price index expanded at 0.6% y-o-y in August following similar growth in July. The agency stated rising food prices and air fares were partly offset by cheaper hotel room prices. Meanwhile, the retail prices index (RPI) measure of inflation, which includes mortgage interest payments, dropped to 1.8% in August from 1.9% in July.

Citing uncertainty over the UK’s Brexit negotiations, the British Chambers of Commerce (BCC) has downgraded the growth forecast for the UK for 2016 to 1.8% from 2.2%. Moreover, the agency has cut the growth forecast for the UK economy for 2017 to 1% from 2.3%.

Japan’s Cabinet Office informed on Monday that the country’s core machinery orders increased 4.9% m-o-m in July, thereby signalling a pick-up in capital spending activities, compared to an 8.3% m-o-m rise in June. On a y-o-y basis, the orders increased 5.2% for the month.

The ECB kept its main interest rates on hold at zero percent. In addition, the bank kept the rate on deposits from commercial banks unchanged at -0.4% and the marginal lending facility rate at 0.25%. The ECB also maintained its bond-buying stimulus package at €80bn per month.

As per the estimates of the National Institute of Economic and Social Research (NIESR), the UK economy expanded 0.3% in the three months to August vis-à-vis 0.4% in the three months to July. This data corroborates views that the UK economy is experiencing a slowdown.

As per Eurostat, Eurozone’s GDP grew at 0.3% q-o-q in Q2 2016, after a 0.5% growth in Q1 2016, in line with the preliminary estimate. On the expenditure side, growth in household spending eased to 0.2% from 0.6%. Similarly, government spending rose 0.1%, slower than the 0.6% increase in Q2 2016. On a y-o-y basis, Eurozone’s GDP grew by 1.6%, after a 1.7% increase in Q1 2016.

As per the British Retail Consortium, like-for-like sales in the UK edged down 0.9% y-o-y in August after a 1.1% drop in July, missing the expectation of a 1.4% rise. Conversely, total sales inched down 0.3% y-o-y in August, compared with a 1.9% gain recorded in July, marking the weakest performance in two years.

Japan’s government has warned that Brexit could result in the country’s firms moving their European head offices out of Britain. The strongly worded report from Japan’s foreign ministry says the firms might want to move “if EU laws cease to be applicable in the UK”. It calls on Theresa May’s government to deal with the companies’ concerns in a “responsible manner”. Japanese firms employ an estimated 140,000 workers in the UK, with Nomura bank, manufacturing giant Hitachi and carmakers Honda, Nissan and Toyota all having major bases in the country.

As per Markit, the UK’s manufacturing PMI rose to 53.3 from 48.3 in July, the highest reading in 10 months. The sharp rise was mainly due to the weakening of the pound after the Brexit vote, which boosted exports.

FTSE-100 FTSE-100 1 Year Chart “Equities in London are expected to open on the front foot this morning in anticipation of August’s UK manufacturing PMI data, which is due to be released at 09:30hrs and should be seen to calm fears that industrial confidence had been severely knocked by June’s Brexit vote.  July’s disappointing reading […]