US business activity cools in April

Manufacturing and Services PMI’s

In April, business activity in the US expanded at its slowest rate this year due to decreased demand, resulting in the first decline in employment since 2020.

The Flash Services PMI from the S&P Global composite index, which measures output at both manufacturers and service providers, fell by 1.2 points, the largest drop since August, reaching 50.9.

Whilst the Flash Manufacturing PMI fell to 49.9, slowing to its first contraction since November.

In other data, the US new home sales surged in March despite elevated mortgage rates. Government figures released on Tuesday revealed a significant surge in new home sales, which account for approximately 10% of the market.

Sales jumped by 8.8% last month to a seasonally adjusted annual rate of 693K surpassing economists' projections of 670K according to a FactSet poll. Marking the most substantial monthly increase since December 2022.

In commodities

Oil prices continued to rise on Wednesday following unexpected data revealing a decline in US crude stocks last week, suggesting increased demand. However, market focus also remained on tensions in the Middle East.

Interest rate cuts in the US could potentially stimulate economic growth, leading to increased demand for oil from the world's largest consumer of the fuel.

Brent crude hovered near $87, while WTI to $82.73 after touching lows of $80.

In currencies

The US dollar recovered slightly after significant declines against the euro and sterling the previous day.

The euro edged down 0.1% to $1.0684, following a 0.4% rally yesterday. Following the release of business activity data in the eurozone that showed an expansion at its quickest pace in nearly a year, driven primarily by a rebound in the services sector.