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In November, activity in the British manufacturing sector speeded up a bit, although was still subdued because new export business went down for a second month in a row. That’s what follows from a closely watched business poll published on Monday.
As research company IHS Markit informed, its manufacturing purchasing managers’ index jumped to 53.1 last month, soaring from October’s 27-month minimum of 51.1.
It outperformed estimates of 51.6, although it was still among the poorest outcomes recorded for the last two-and-a-half years.
The leap occurred due to the fact companies rushed to stockpile products for the purpose of protecting themselves against probable supply disruptions after Brexit.
As some financial analysts pointed out, the November PMI gave rather a lackluster picture of the British manufacturing sector due to the fact everlasting global trade tensions along with Brexit uncertainty put pressure on current business conditions and also affected the outlook for the year ahead.
Built around its relationship against official ONS data, the poll indicators hinted that manufacturing output won’t probably make any contribution to GDP surge in the final quarter, with a clear risk of output shrinking unless December proves a stronger month.
The level of new export business went down for the second month in a row November. It turns out to be the first back-to-back dive since early-2016. What’s more, a lot of companies cited everlasting Brexit uncertainty as the number one reason for the dives.
Employment in the sector managed to pick up a bit following a poor month in October. However, the overall degree of business optimism went down to a 27-month minimum. Explaining it financial analysts drew attention to exchange rate fears, Brexit uncertainty as well as a decelerating economy. Undoubtedly, all of this put pressure on confidence.
The risk sentiment remains under pressure after the comments by China about the countermeasures against the US tariffs. Thus, the AUD/USD and the USD/JPY pairs will be under our attention.
During the European trading session, both the US and the UK yield curves inverted.
Levels for Wednesday's trading
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