An update on the 8th September 2015 from my friends at London & Capital

US economic data continues to improve, but enough for a September rate hike?

“In the US last week, important macro data was released, culminating in Friday’s August payroll numbers. The headline figure of 173k new jobs disappointed but an upward revision of 45k to previous months helped the 3-month average stay above 200k. The unemployment rate fell to 5.1% while average hourly earnings picked up 0.3% MoM. Earlier in the week, the ISM Manufacturing number for August came in below the consensus forecast at 51.1, though the non-manufacturing number came in above expectations at 59 (vs 58.2 forecast).

In China, slowdown fears continued as August’s official manufacturing PMI fell 0.3pts to 49.7, the first sub-50 reading since February. The non-manufacturing reading was 53.4, down from 53.9 last month.

In Europe, all eyes were on the ECB’s reaction to recent market volatility. The Central Bank’s growth and inflation forecasts were revised down for 2016 in particular, with the council noting downside risks to these revisions. Also stated was the ECB’s ability to extend the QE programme if required. The headline CPI number for August came in marginally higher than expected at 0.2% YoY.

In the UK, manufacturing PMI numbers disappointed (51.5 vs 52 consensus) as did services (55.6 vs 57.7 expected), while the construction survey remained relatively healthy at 57.3.”

More of the same I am afraid. The issue is, will the USA raise interest rates?