ADP Payrolls Show US Pace of Hiring Slowing

Daily Analysis - 05/05/2016

Private Payrolls rose 156k in April, less than forecasts


Private sector hiring in the US was weak in April, rising only 156,000 while March's payroll numbers were revised lower from 200k to 194k, data from ADP Inc. showed on Wednesday. The services sector added jobs at a slower pace while the manufacturing sector continued to shed jobs. Small businesses continued to stay at the forefront, driving job growth.

French Trade Deficit Narrows in March

Trade deficit data released by the French customs office on Wednesday showed that the country’s trade deficit narrowed in March as imports fell faster than exports. Exports fell to 36.38 billion euros, from February's 37.87 billion. Imports fell to 40.75 billion in March, compared to February's 42.98 billion. The French current account deficit fell to 1.81 billion euros in March, down from 4.1 billion February. Services posted a surplus of 1.2 billion in March, following February's deficit of 0.1 billion, according to the Bank of France. Earlier this week, the EU commission released fresh forecasts and cut expected French GDP growth to 1.50% in 2016 and 1.70% in 2017, while the 2016 budget deficit is expected to be around 3.3% of its GDP.


Riksbank Decides to Expand its QE Program

The Swedish Riksbank released the minutes yesterday for the April 21st monetary policy meeting where the central bank expanded its QE purchases but left interest rates at -0.50%. The meeting minutes showed that the central bank remains ready to act if the SEK continued to appreciate. Deputy Governor Per Jansson described the risk of the Krona strengthening too rapidly as an overhang. The minutes noted that the expansion to the QE program announced at the April meeting was a signal that the central bank was committed to reaching its 2.0% inflation target. Deputy Governor Henry Ohlsson said that the government bond purchase program will continue into the second half of 2016 but notes that the pace of the purchases should slow down. The central bank said that overall there were encouraging signs that the Swedish economy was growing.


UK Construction PMI Falls to a 3-Year Low

Economic data from the UK continues to disappoint with the construction PMI falling to a 3-year low in April. Data released by Markit on Wednesday showed that the UK construction sector weakened to 52 in April, from 54.2 in March. Although still above the reading of 50 which indicates expansion for the 36th consecutive month in April, the declines from March were very noticeable with construction output falling 0.90% in the first quarter, underlining the fact that the upcoming UK referendum on EU membership was already taking its toll. The weak construction PMI reading comes on the back of the manufacturing PMI released on Monday which showed that the manufacturing sector fell into a contraction for the first time in three years in April slipping to 49.2 from March's 51.2


Canada: Building Permits Expected to Decline in March

Data will be released today on Canada’s monthly building permits which is known to be a volatile report. Analysts expect to see a 4.60% decline in March following February's positive growth of 15.50%. Today’s data is expected to show a modest slump following the surprise increase. Yesterday, data from Statistics Canada showed that exports fell for a second straight month in March, down 4.80% with a 6.30% decline in US bound products. Nearly all the sectors tracked in the report fell sharply, resulting in trade deficit hitting a fresh record of 3.41 billion.


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