The Week Ahead: UK manufacturing data will sit in the shadow of China

A rise in US interest rates appears to have been written off in the wake of the recent market turmoil

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The Independent Online

An absence of big corporate announcements this week means the City’s gaze will be fixed on economic data.

Today’s manufacturing data from China is likely to dictate the direction of stock markets worldwide, with mining stocks most at risk due to their reliance on China, the world’s largest importer of industrial metals.

China’s slowdown has triggered a meltdown in global markets in recent weeks so investors will be watching the health check closely.

The UK’s own manufacturing data this morning will be somewhat overshadowed by China’s, but will still be closely scrutinised. Having come in at 51.9 in July (with a reading of 50 representing growth) it is expected to dip slightly in August.

On Wednesday, the focus shifts to the meeting of European Central Bank policymakers, with the press conference and decision the following day. No change is expected in interest rates but investors will be listening out for comments on the state of the eurozone and also hints about whether its quantitative easing programme will be expanded.

Friday sees the release of the monthly US non-farm payrolls report, revealing how many jobs the world’s largest economy added in August.

A rise in US interest rates appears to have been written off in the wake of the recent market turmoil, but a strong report – expected to show a slight decline in jobs added, at 209,000 – may support the hawks pushing for a rise this month.

Elsewhere, mortgage approvals data today is likely to show a pick-up in housing market activity in the UK, while on Thursday, the UK’s dominant services sector is expected to show it grew at an even faster pace than in July.

On the corporate front, August’s passenger stats from the airlines are out. However, the fluctuating price of oil is likely to have a much greater effect on their shares as it affects the price of fuel.

Equipment rental firm Ashtead is due to release its first-quarter results tomorrow, while bus and train operator Go-Ahead has its final results out on Thursday.

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