Tuesday, October 02 09:07:51
The ISEQ is up slightly this morning at 3,287, a rise of just 8 points on yesterday's closing levels as markets are nervous about Spain's intentions regarding direct assistance from the Troika.
The UK housing market is at best stagnant and it is examined by Davy Stockbrokers this morning:
The Nationwide index of UK house prices fell again on the month in September, with the 0.4pc fall leaving house prices down 1.4pc on the year. The average price of a house is now £264,700, with Nationwide expecting a continued stagnation in prices over the coming year. Despite unusually strong labour market data in the face of declining output in 2012, market activity has remained at subdued levels in 2012. Mortgage approvals ticked up marginally in August to 47,665, less than half of the monthly average at peak in 2007, and below consensus estimates of 50,000.
The Bank of England's 'Funding for lending' scheme, which provides cheaper funding to banks that improve lending to households and SMEs, is expected to bear fruit over the next year, but the full effect of the scheme may take time to work its way into actual approvals. Nevertheless, lenders expect to increase the availability of credit to households in the coming quarter according to the latest Bank of England credit conditions survey, so we may yet see some upturn in activity in Q4, albeit from a very low base.
The UK construction PMI for September, released this morning, is expected to improve slightly to the 50 no-change level from a reading of 49 in August, implying that construction output has continued to stagnate if not decline in Q3. In H1, construction output fell 8.7pc, dragged down by continued cuts in public expenditure and renewed falls in private sector investment. While one-off factors may be at play in exacerbating the falls in output in H1, such as the extra Jubilee public holiday, the underlying trend is weak, with new construction orders improving little in Q2, which likely fed into another weak quarter of growth in Q3 according to Davy Stockbrokers.