And finally... US factories have posted their biggest drop in orders in three years - giving traders another excuse to kick the dollar.

Reuters has the details:

New orders for U.S.-made goods recorded their biggest drop in nearly three years in July,but orders for capital goods were stronger than previously reported, pointing to robust business spending at the start of the third quarter.

Factory goods orders tumbled 3.3 percent amid a slump in demand for transportation equipment, the Commerce Department said on Tuesday.

That was the biggest drop since August 2014. June’s data was revised to show orders rising 3.2 percent instead of the previously reported 3.0 percent surge.

The dollar has now dropped to a new one-week low against the yen, below ¥109.

And the pound has now risen above $1.30 for the first time since mid-August.

And that’s a good moment to stop. Thanks for reading and commenting. GW

And it’s that time of year when Greece returns to the headlines with the country’s finance minister discussing bailout progress with the EU’s economic commissioner Pierre Moscovici this afternoon.

Helena Smith reports from Athens

The meeting at 4:30pm Brussels time effectively kicks off yet another bailout review between Greece and the international lenders keeping the debt-stricken nation afloat.

One week before technical teams return to Athens, Euclid Tsakalotos, the Greek finance minister and his deputy Giorgos Houliarakis, will attempt to gauge the mood of creditors with Moscovici.

The negotiations, which begin in earnest next month, will focus on around 100 ‘prior actions,’ or reforms, Athens will have to implement if it is to exit its third, €86bn bailout by August next year.

The leftist-led government is hoping the review – the third since the last financial rescue program was agreed in August 2015 – will be completed by December enabling it to return to international markets to finance its debt in 2018.

Today’s meeting comes against the background of controversy caused by Moscovici’s assertion that Greece’s financial rescue was far from democratic.

Speaking to Corriere della Sera, the EU commissioner said:

“It is a scandal in terms of democratic processes, not because the decisions were scandalous, but because the fate of a nation was decided in this way, with the imposition of detailed decisions on pensions and the labour market ... I am talking about the basic details of the life of a country that were decided by a body, behind closed doors, whose work is prepared by technocrats ... without the minimum control of a parliament, without the media really knowing what is being said.”

Film fans will remember that concentrated orange juice futures play a key role in classic movie Trading Places.

And they’re also in the news today for more serious reasons - they’re surging as America prepares for its next hurricane to arrive.

Hurricane Irma is strengthening, and heading towards Florida and Puerto Rico. So while local authorities prepare for major disruption, traders are anticipating that Florida’s fruit-producing economy will take a hit.

The price of frozen orange juice futures has already jumped by 6% in heavy trading:

Over in New York, the US stock market has opened in the red.

The Dow Jones industrial average dropped by 0.3%, or 71 points, in early trading to 21,916 points.

The S&P 500 and the Nasdaq also lost ground, as traders got back to work after Monday’s Labor Day break, and a weekend dominated by North Korea.

Dollar drops as Brainard gives dovish speech

Over in America, a key central bank policymaker has argued that US interest rates could rise more slowly than expected.

Federal Reserve governor Lael Brainard says that her colleagues should be cautious before voting to increase borrowing costs again, as underlying inflation pressures are low.

That’s a sign that Brainard may not be keen to raise borrowing costs at the next Fed meeting, later this month.

She told the Economic Club of New York that strong unemployment figures don’t tell the full story...

There is a notable disconnect between signs that the economy is in the neighborhood of full employment and a string of lower-than-projected inflation readings, especially since inflation has come in stubbornly below target for five years…

Brainard also hints that raising borrowing costs too fast can be dangerous; if it slows growth too much, then the Fed might be forced to cut rates again.

Sustainably achieving our inflation objective is especially important, given the apparent persistently low level of the neutral rate and the resulting limited room for maneuver above the effective lower bound.

Brainard is known as one of the more dovish Fed members anyway, but these comments have still knocked the dollar to a one-week low against the yen.

Drama has been in short supply across Europe’s stock markets so far today.

The French and German indices are up a bit, while London’s FTSE 100 has dipped slightly into the red.

The pound has recovered a little ground against the US dollar to $1.295, from $1.293, despite the slowdown in the service sector.

Connor Campbell of SpreadEx says:

Surprisingly sterling wasn’t too bothered about the dip, instead rising 0.2% against both the dollar, weakened by the North Korea issue, and the euro, which is facing the uncertainty of Thursday’s ECB meeting.

This meant the FTSE lost whatever meagre momentum it had after the bell, the index slipping 0.1% to loiter just above 7400.

But....what happened to those worries over North Korea that everyone was talking about yesterday? Well, there’s been nothing (yet) today to raise the risk of nuclear destruction, so traders have taken their minds off it.

David Madden of CMC Markets cautions that this situation may not last long...

We have seen this scenario before where tensions rise and stocks fall, followed by no new developments, and then equities bounce back.

The situation is still ongoing, so today’s positive move could be down to short covering and a bit of bargain hunting. In tense times while these, not many investors would buy into the market for the long haul.

Obviously it’s good news that British service sector companies took on more staff in August (as mentioned earlier).

But, it also highlights a wider problem. Unless this hiring creates extra growth, then the UK economy will simply become more unproductive (as we’ll have more people cranking out the same amount of output).

Economist Rupert Seggins predicts that productivity will actually fall this quarter:

So what’s happening? The suspicion is that Britain’s services sector is relying on low-paid, insecure workers for growth, rather than splashing on expensive new equipment.

This map shows how little capital is invested per worker in the UK, compared to say Germany:

Andy Bruce of Reuters has tweeted a nice chart, showing how the UK services PMI is too low to justify an interest rate hike.

The yellow line shows the services PMI, while the green spikes are interest rate hikes or cuts.

The pound has dipped a little, to $1.2920, following today’s services sector PMI.

Naeem Aslam of Think Markets says traders are dialling back their expectations for future interest rate rises.

The services PMI data has shown that the UK’s economy is losing its steam and this means that the Bank of England would have to continue its support. The services PMI data fell short of forecast and traders have pushed the sell button on the back of this....

The Brexit negotiations are going nowhere and this is weighing on the economy and momentum is gradually losing its strength.

The UK urgently needs a credible ‘transition plan’ for life after Brexit to restore confidence among companies, tweets Julian Jessop of the Institute of Economic Affairs.

Duncan Brock, of the Chartered Institute of Procurement & Supply, warns that some UK services companies were “paralysed by economic hesitancy” in August.

Others, though, shrugged off the uncertainty and pressed on with new product launches.

Brock saus August was:

“A slowdown month as the services sector comes off the boil, challenged by a general unwillingness to spend and invest, alongside fragility in confidence amongst consumers as a result of Brexit.

It’s not all bad news, though.

UK service sector companies created more jobs for the third month running in August, at the fastest rate since the start of 2016.

Customer-facing companies such as hotels, restaurants, cinemas, hairdressers and gyms suffered the weakest growth last month, Markit says.

Chris Bosworth, director of strategy at Close Brothers Motor Finance, says the drop in UK car sales in August isn’t a big surprise.

August is a notoriously testing month for new car registrations as consumers divert their spending toward family activities and holidays, so these figures shouldn’t come as a complete shock to the industry.

However, Britain’s exit from the EU is also casting a shadow over the sector, Bosworth adds:

“With Brexit negotiations well underway and the government announcing radical changes to the sale of fossil fuelled cars, the motor industry is entering a wave of prolonged uncertainty. This will likely have an impact on consumer spending habits. The Bank of England has already announced that car finance deals have eased as a result.

“In fact, 5.5 million British motorists say Brexit has already had a direct impact on their car purchasing plans and has made them more likely to purchase a used car or to hold off their purchase altogether – all of which can have a knock-on effect on the industry and the wider economy. That said, now that the new car registration plates have been released, we expect consumers will splash out on new cars over the next month, keeping in line with the annual trend.”

Just in: Growth across the eurozone’s service sector has hit a seven-month low, but remains robust.

Markit’s euro-area services PMI has come in at 54.7, down from July’s 55.4, and below the ‘flash reading’ of 54.9 released in late August.

Growth picked up in Ireland and Germany, but slowed in Italy, France and Spain.

Lego says its overall performance in the first half of 2017 was “mixed”, explaining why it is cutting so many jobs.

Revenues declined in established markets such as the United States and in parts of Europe, but it achieved double-digit growth in China

Here’s the topline:

• Revenue down 5 percent to DKK 14.9 billion compared with DKK 15.7 billion
• Operating profit down 6 percent to DKK 4.4 billion compared with DKK 4.7 billion
• Net profit down 3 percent at DKK 3.4 billion compared with DKK 3.5 billion

Crumbs. Lego is planning to cut around 1,400 jobs, after suffering a 5% drop in revenues this year.

In a statement, LEGO Group Chairman Jørgen Vig Knudstorp says:

“We are disappointed by the decline in revenue in our established markets, and we have taken steps to address this.

Those steps include sweeping job cuts, that will reduce its global workforce of 18,200 by around 8%.

Most of the 1,400 positions will be cut before the end of the year.

Knudstorp adds:

“We are very sorry to make changes which may interfere with the lives of many of our colleagues. Our colleagues put so much passion into their work every day and we are deeply grateful for that.

Unfortunately, it is essential for us to make these tough decisions.”

August was a rough month for Indian companies, it appears.

New tax changes and the controversial demonetization policy both hurt growth, according to the latest PMI reports.

The Nikkei India Services Purchasing Managers’ Index hit 47.5 in August, up from July’s 45.9, but still showing a contraction.

Markit, which compiles the survey, says India’s new Goods and Services Tax (GST) - which replaced a swath of local taxes - hurt spending.

Pollyanna De Lima, Principal Economist at IHS Markit warns;

“The underlying trend for services is one of uncertainty. Businesses are holding back on investment, leading to falls in employment. At the same time, input costs are increasing and firms are unable to fully pass these on due to competitive pressures. It’s not all doom and gloom, however, as activity, new business and employment showed much slower rates of reduction than those noted in the prior survey period.”