UK industrial activity accelerates in October and reaches the highest level in five months

The UK industry gained momentum in October. According to InfoMoney, the country's industrial Purchasing Managers' Index (PMI) rose to 52.8 points, compared to 51.9 in September, the highest level in five months. The final number confirmed the preliminary reading and was in line with the consensus compiled by FactSet.

For those who follow the stock market, interest rates and exchange rates, the reading has an objective meaning. According to the indicator's criteria, values ​​above 50 points signal expansion in activity, and the October mark is well above this line.

The final data was released on Monday, November 2, by S&P Global, responsible for the survey.

In Germany, the movement had the same direction, although at a more moderate pace. The German industrial PMI rose to 54.2 points in October, compared to 53.9 in September. The final data, also released on Monday by S&P Global with Hamburg Commercial Bank, confirmed the FactSet preview and consensus.

The two numbers, read together, show the industry is expanding in both markets. The question that remains is whether this momentum will be sustained in the coming months, something that the October data alone cannot answer.

What changes for the investor

Industrial activity indicators weigh on expectations about economic growth and the path of interest rates, two factors that influence cyclical stocks, currencies and bonds. Readings above 50 and rising reinforce the scenario of heated activity, but do not guarantee gains on the stock market or define the direction of the dollar or interest rates. Those who operate Nasdaq, foreign exchange or fixed income tend to cross-reference this type of data with inflation, monetary policy and company results before drawing any conclusions.

Automatically translated from Portuguese.