Europe Aims Higher, UK House Prices Rise
Fiona Cincotta September 2, 2020 5:03 PM
UK house prices jump +2% mom. Attention turn to BoE's Andrew Bailey and ADP employment data.
Unexpectedly strong US manufacturing boosted Wall Street overnight, lifting the S&P and the Nasdaq to fresh record highs. The momentum is carrying over into Europe as AstraZeneca begins its final phase of covid-19 vaccine trials and as UK house prices rise. Downbeat German retail sales having little effect on the Dax. Although the Euro remains under pressure.
Housebuilders are on the rise following more good news on house prices. Nationwide house price data showed an impressive 2% jump in house prices in August mon, following from a +1.8% gain in July. Expectations had been for a milder 0.5% rise. House prices are benefitting from the stamp duty holiday, low mortgage rates, pent up demand and people reassessing their housing needs after lock down. However, concerns are also growing that this could be a false dawn. Unemployment expected to rise to 7.5% over the coming months as the government withdraws its support from the furlough programme. Fewer people employed will undoubtedly have an impact on the housing market. This will also come as the UK leaves the EU with no trade deal in place (so far) and then in March the Help to buy scheme which has underpinned a strong rise in housebuilders in also set to expire.
Looking ahead, Bank of England Governor Andrew Bailey will take the hot seat in front of the Treasury select committee where is will discuss the economic impact of coronavirus. His comments will be key.
ADP in focus
Stateside US ADP employment data will be in focus and could drag on GBP, which has eased back from an 8-month high. Expectations are for 950,000 new job hires in the private sector versus just 167,000 in the previous month. A strong number will add to optimism surrounding the economic recovery following upbeat US manufacturing sector data. However, any disappointment could not only drag on sentiment but also pull the USD to multi year lows.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.