Stocks brush off China, U.S. data misses, euro bulls run
By Marc Jones
LONDON (Reuters) - May Day holidays in Europe and much of Asia muted the market impact on Thursday of data showing China's vast manufacturing sector just missed forecasts, a day after U.S. growth numbers had also disappointed.
The dollar weakened after Wednesday's figures for the first quarter showed fierce winter weather dragging on growth. That and persistent doubts about the European Central Bank's policy plans helped lift the euro, something the ECB, which meets next week and is already sweating about low inflation, will not like.
The holidays in most of continental Europe and large parts of Asia left London as the only major market open in the region.
Its FTSE share index .FTSE climbed to a near two-month high in early trade as more strong UK housing data set the tone ahead of a PMI survey that showed manufacturing activity rose much faster than expected in April.
Sterling jumped to a near five-year high of $1.6921 after the numbers as euro bulls also ran the shared currency up to a three-week peak of $1.3889.
The combination of holidays and the start of a new month meant Europe's money market rates, which underpin the cost of loans to consumers and firms but also impact the euro, remained high despite a flood of extra cash this week.
"The reason (for high EONIA rate) is simply because it was month end yesterday," said one London-based money market trader who requested anonymity. "It will come down tomorrow, though the two day-run (of holidays) mean it probably won't be as straightforward as usual."
DELICATE CHINA Continued...