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Economy: currencies boost euro zone, UK factories

Tuesday, May 02, 2017 - 01:54

European manufacturers begin the second quarter at a blistering pace, with the euro zone's factories increasing activity at the fastest rate in six years. As David Pollard reports, factories across much of Asia also got off to a solid start in the second quarter, buoyed by strong global demand, particularly for hi-tech gadgets.

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The passion shows little sign of cooling - Asia's love affair with tech keeping factories at full pace. Growth in electronics exports has been a highlight of the region's recovery. And though China's manufacturing growth eased more than expected in April, its latest PMI still points to expansion. For Europe - or at least its exporters - it's the euro. A cheap single currency continuing to boost orders ... Helping drive the euro zone manufacturing PMI to a six-year high. Strong growth not just in Germany, but also France, Spain and Italy. (SOUNDBITE) (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "That supports the evidence that the ECB has done incredible job in restoring the growth because the ECB has pulled the euro zone economy out of this double dip recession. The unemployment rate is also gradually moving lower and the PMI and the manufacturing numbers are also improving." With euro zone inflation now at the ECB target rate, the pressure is on Mario Draghi to plan an exit from ultra-loose monetary policy. If in the short-term, political risk might prevent him from doing that. A victory for the markets' favourite, Emmanuel Macron, in France's presidential election seen as likely - but markets on guard nevertheless. (SOUNDBITE) (English) THINK MARKETS, CHIEF MARKET ANALYST, NAEEM ASLAM, SAYING: "What potentially can happen on coming Sunday night a number of people could just say 'okay Macron is going to win the election regardless, we don't need to vote'. That's going to bring a major impact on the polling data and the election results." With little over a month to go before a UK election, prime minister Theresa May will take heart from a manufacturing PMI at a three year-high. Data last week suggested growth overall is slowing - despite a weaker pound boosting exports. A recent surge in sterling now makes even that look more uncertain.

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Economy: currencies boost euro zone, UK factories

Tuesday, May 02, 2017 - 01:54