3 Numbers To Watch: UK PMI, US ISM Manufacturing & Construction Spending

Some mixed data out of Asia earlier to kick start the day. On the positive side, China's (official) PMI Manufacturing rose to its highest level in 13 months in April at 53.3 (53.6 expected) and 53.1 prior though there has been some talk since about seasonality pushing the number higher. Austrlia, on the other hand, not only cut rates more than expected by 50bps to 3.75% vs. 4% expected, but its version of PMI Manufacturing declined to a miserable 43.9 from 49.5 earlier - the lowest level since the depths of the global recession. We continue with the "global PMI day" today as the UK and US will also release their April numbers and we also get Construction Spending from the latter to boot.

April UK PMI Manufacturing (08:30 GMT) to ease somewhat: Despite some improvement in the numbers from the UK they have failed to beat expectations. The Citi Surprise Index from the UK is back below zero at -7.6 having peaked at 97.6 in mid-February. This was also evident in last week's GDP release, which saw the economy return to recession with a -0.2% q/q print in 1Q'12 (after -0.3% in 4Q'11) as private and public sector austerity more than offset any gains from other parts of the economy. Consensus looks for more of the same in today's PMI Manufacturing report, which they forecast will show a slowdown to 51.5 in April from 52.1 a month earlier.

April US ISM Manufacturing (14:00) to decelerate, but still grow: Yesterday's Chicago PMI was not exactly an optimistic precursor of today's national PMI report as the index plunged 6 points to 56.2 vs. expectations of 60. Especially the Production and to some extent New Orders components were poor, but on the other hand it is worth mentioning that this auto-dependent report has been overstating US growth for several years now as the auto sector has rebounded forcefully from near extinction in Great Recession. Therefore a similar sharp drop should not be expected in today's report, but will rather more likely ease lower in line with the string of regional Fed surveys that have done the same.

March US Construction Spending (14:00) to improve towards end of Q1: As it feeds directly into the GDP report this report bears watching. A weak February (-1.1% m/m) is expected to be replaced by a halfway comeback on March of +0.5% according to consensus. In the first take on Q1 GDP (which was released last week and showed growth of 2.2% q/q ann.) residential investment were estimated to have risen 19.1% annualised from 11.6 a quarter earlier while structures were seen down 12% from -0.9% prior.