All articles tagged with #pmi data
Recent data shows an increase in US jobless claims and continuing claims, indicating some labor market softness, while PMI data suggests economic expansion, and housing sales have slightly rebounded, with expectations of a potential interest rate cut by the Fed.
In the upcoming week, investors should keep an eye on US data, including personal consumption expenditures and fourth quarter GDP, as well as earnings reports from major companies like Netflix, Tesla, 3M, and Intel. Additionally, central banks, including the Federal Reserve, European Central Bank, and Bank of England, are set to hold policy meetings, while flash PMI readings for the Eurozone, UK, and US will provide insight into global business activity. Oil prices, influenced by Middle East tensions and disruptions to oil output, are also expected to remain in focus.
The Euro Area economy continues to struggle, with business activity falling at a steeper rate in December and output declining at its fastest rate in 11 years. The Eurozone is likely to enter a recession in the coming weeks. The European Central Bank (ECB) has kept rates steady and pushed back against market expectations of rate cuts in 2024. However, if the Euro Area falls into recession and inflation continues to fall, the ECB may have to reconsider its stance on interest rates. The weakness in the US dollar has accelerated after the Federal Reserve signaled potential rate cuts in 2024. EUR/USD touched a four-month high but failed to break above 1.1000 after weak PMI data was released.
The focus in Asian markets this week is on whether the U.S. Treasuries selloff will abate. While economic indicators and policy decisions in the region are limited, third-quarter GDP data from South Korea and consumer price inflation reports from Australia, Singapore, and Tokyo will be released. Flash PMI data from Japan and Australia will also be published. However, the broader market sentiment will likely be influenced by the U.S. bond market, which experienced a significant fall last week. Financial conditions have tightened globally, with China facing the tightest conditions since 2006. Chinese central bank governor Pan Gongsheng has pledged to make policy more "precise and forceful" to reduce financing costs. The yen and yuan are under selling pressure, and Bank of Japan intervention is being watched. Japanese and Australian PMI data for October will be released.
The US services sector is showing signs of contraction as demand slows, with the S&P Global Flash US Services Business Activity Index reaching an eight-month low of 50.2 in September. The composite PMI also dropped to a seven-month low of 50.1, driven by declines in the services sector. Companies cited high interest rates, inflationary pressures, and increased operating expenses as factors weighing on client demand. However, the labor market remains resilient, with job creation at its fastest level since May and businesses finding it easier to fill job openings.
The release of U.S. nonfarm payrolls and a barrage of manufacturing data, along with a surprise expansion in China's factory activity, are expected to shape market sentiment. The Federal Reserve is closely monitoring the U.S. labor market for signs of cooling, while uncertainty remains about the possibility of rate hikes for the rest of the year. China's economic troubles have prompted major banks to cut interest rates, and the country's stock market has shown signs of recovery. Additionally, the euro zone's final PMI data and warnings from European Central Bank members about potential rate hikes will add to the ongoing debate over the rate outlook in Europe.
Oil prices fell on Friday, with both Brent and WTI crude on course for weekly losses of more than 4%, due to concerns over global economic growth following a series of rate hikes by central banks. The Bank of England surprised markets by hiking interest rates by 50 basis points, while central banks in India and Turkey also hiked rates. The Energy Information Administration reported that US crude inventories shrank more than expected in the week to June 16. However, PMI data from several countries suggests downside risk is a possibility.
Oil prices fell over 3.5% after China's PMI data for April came in lower than expected, shaking the prospect of Chinese demand lifting oil prices. Saudi Aramco is in talks with Sinopec and TotalEnergies for a $10 billion deal to develop the unconventional gas resources of the Jafurah gas field. LNG imports into key Asian consumption hubs have dropped to the lowest this year, coming in at 20.9 million tonnes in April, as subdued buying from China and Japan lowered JKM LNG prices to $11.5 per mmBtu. French oil major TotalEnergies agreed to purchase LNG from Emirati national oil company ADNOC worth $1.2 billion, securing liquefied gas supplies for the upcoming winter. California's energy regulator voted to approve new emission rules that would require all medium- and heavy-duty vehicles sold in the state to be zero-mission by 2036.
The coming week will see the earnings season hit full stride, with results expected from several big banks and companies. Investors will also have a final chance to hear from Fed officials before they enter their traditional blackout period ahead of the May policy meeting. PMI data from the Eurozone, the U.S., and the U.K. will show whether growth is slowing and how quickly. The U.K. is to release inflation and growth data, which could determine whether Bank of England officials decide to hike interest rates next month. China is to release a flurry of economic data, with market participants hoping for more clarity on the uneven recovery in the world’s second-largest economy.