Last month saw economic sentiment in the UK sour even further with the collective PMI's falling sharply across the board. While the services and construction PMIs fell to 13-year lows, the manufacturing PMI contracted in April underlining the downturn in the UK's economy. In the first quarter, GDP growth was 0.40%, down from 0.60% in the previous quarter. With Brexit weighing heavily on investor sentiment, the economic outlook remains bleak.
In Australia, the RBA cut interest rates last week by 25bps to 1.75% after keeping interest rates steady at 2.0% for over a year. Economic data from Australia remains mixed. GDP remains moderately in expansion but inflation slumped. The rate cut from the RBA this week was followed by the quarterly forecasts which saw the central bank lower its inflation expectations from 2-3 percent to 1 - 2 percent. However, the RBA remained upbeat on GDP and employment prospects.
This week, the US nonfarm payrolls report for April released by the US Bureau of Labor statistics on Friday showed that the US economy added 160k jobs, below analysts’ consensus of 200k. The unemployment rate in the world's biggest economy remained unchanged at 5.0% while average hourly earnings increased at the same pace as last month of 0.30%. The soft print in the NFP for April is seen to significantly lower the chances of a June rate hike. The weak NFP print comes after ADP reported that the US economy added 156k jobs in April, missing forecasts of 205k.