UK reported stronger than expected construction PMI numbers - BBH

The analysis team at BBH points out that UK reported stronger than expected construction PMI as unlike the manufacturing PMI reported earlier in the week, where the decline was not fully anticipated, the construction PMI rose outright.  

Key Quotes

“The 56.0 reading is a new two-year high and compares with April's 53.1.  An interesting insight into this smallest of the three surveys is that the higher prices from sterling's past depreciation appear to be fading as input prices rose by their least in seven months.”

“The economic news in the UK is playing second fiddle to the politics.  More polls will be released over the weekend.  Net-net since the election was called, the Tories support in a poll of polls is little changed.  The tightening of the polls seems to reflect a gain in Labor’s support at the expense of the Lib Dems and UKIP.  Although we have pointed out developments in the options market that show at least some investors are buying downside protection, we remain surprised by the stability of sterling.  At $1.2860, it is up 0.4% on the week.  It fell about 0.5% in the month of May.”

“Sterling had been sold to near $1.2770 mid-week before recovering to post an outside up day.  It has spent yesterday and today within the mid-week range.  A break of the $1.2820-$1.2920 range could spur a cent move.  Note the euro is flat against sterling this week. If this is sustained, a five-week advancing streak for the euro will have been snapped.”