A flurry of good news to end the week

Several good news lifted UK shares yesterday, including the announcement that the House voted in favour of the US debt-limit deal and the release of the Caixin manufacturing index, which showed that the Chinese manufacturing sector was in expansion territory last month. Although this was slightly confusing to investors since a day before, the Chinese PMI manufacturing index indicated that the sector was in contraction territory. In any case, another good news came from data showing inflation cooled down more than expected in the eurozone.

And to top it all, the US Prices Index of the ISM manufacturing index registered 44.2%, down 9 percentage points compared to the April figure of 53.2%, which strengthened bets of a rate hike pause by the Fed. The FTSE 100 ended the session 0.6% higher.

And the momentum keeps going today, with the blue-chip index up 0.5% higher at 9am, trailing upbeat trading in Asia and on Wall Street. This is because US senators voted to suspend the federal debt limit, which avoids the catastrophic scenario of a US default.

Investors are awaiting today’s U.S. non-farm payroll report, which will be released this afternoon, to get more clue about the Fed’s next move on monetary policy.

 

Things to read today:

‘Faith in the Speaker’: Kevin McCarthy defies critics with US debt ceiling win (Financial Times)

UK House Prices are Falling Again – And There’s More Pain Ahead (Bloomberg)

South West Water Pays £122mm to Shareholders amid sewage leak backlash (Daily Telegraph)