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Markets: services with a smile boost mood

Wednesday, October 04, 2017 - 01:40

Optimism about global growth has been keeping markets at or close to record highs in recent weeks. As David Pollard reports, the euro zone is doing particularly well with surveys showing businesses are now struggling to keep up with the demand.

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The euro zone's production lines can't, it seems, keep up. September's PMIs show new orders growing at their fastest in six years, firms finding it more difficult to fill backlogs. And a composite reading for services and manufacturing - at 56.7 - comfortably above the 50 that denotes growth. The prices firms charge were up too .... As a good news story just gets better. (SOUNDBITE) (English) GARRY WHITE, CHIEF INVESTMENT COMMENTATOR AT CHARLES STANLEY, SAYING: "Corporate earnings again on the right track and the ECB balance sheet is expanding. All these are supportive and also we have some positive signs in unemployment in the eurozone as well which is really significant." Services provided the biggest treat. Pushing Germany's overall PMI to 57.7 - another six-year high - and France's to 57.1. There, too, price rises have boosted thoughts the ECB may announce a first, gentle move towards policy tightening when it meets this month. Though that appeared to have few worries for traders at the DAX .... Where the bulls were firmly in charge. (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The DAX mood is very good, we have a new all time high. Tax cuts in the United States mean German export companies operating out of the U.S. will also profit. I am convinced that monetary policy will remain generous." Share prices globally look generous too - major indices around the world continuing to hit new highs. That despite Japan's services showing their slowest growth in 11 months. And the UK's ongoing struggles. Brexit once again seen in the PMI surveys as a factor for new orders slowing to their weakest in over a year.

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Markets: services with a smile boost mood

Wednesday, October 04, 2017 - 01:40