GBP News

The UK's service sector grew at its fastest rate since March 2011 in January, according to a closely watched survey. The Markit/Cips services purchasing managers' index (PMI) rose to 56.0. Any figure above 50 indicates growth. Markit also reported the biggest monthly rise in business optimism since the survey started 15 years ago. The data will reduce fears of a new recession, as heavily pushed by the media over the last few weeks. An increase in new business also drove employment in the sector to rise at its fastest pace since March 2008, the survey found. The data follows a similar survey showing the UK's manufacturing sector returned to growth in January, with overall activity at its highest level for eight months. The results will be closely analysed by the Bank of England when it meets next week. The Bank had been expected to expand its quantitative easing programme to provide extra credit to the economy.

EUR News

The Euro zone's service sector has grown for the first time in four months, although Spain and Italy have continued to post falls in business activity. The Markit Euro zone services purchasing managers' index (PMI) was 50.4 in January, up from 48.8 in December. Any score under 50 represents a contraction. It follows a manufacturing survey of 48.8, up from 46.9 in December. Markit said the survey suggested a recession could be kept at bay. Chris Williamson, chief economist at Markit said: "The final Euro zone PMI data indicates that business conditions stabilised following declines seen in the final four months of last year and that the region may avoid a slide back into recession." The two surveys helped improve the composite index for January, which includes services, construction and manufacturing, increase to 50.4 from 48.3 in December. The survey also found an increasing gap between the stronger Euro zone economies, such as Germany, and weaker countries such as Spain. The survey found growth hit a seven-month high in Germany and a five-month high in France, while ongoing downturns were seen in Italy, Spain and the Irish Republic. However, the rates of decline fell for Spain and Italy.

USD News

Yesterday data released showed that the US jobless claims declined slightly but did not have much of an impact in the markets. The main focus for today will be on the non farm payroll data which will be released this afternoon at 1.30pm. The markets have seen movements in anticipation of the data release.

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