This week’s economic and market themes piece is going to be a little shorter than usual because I have covered a lot of the major topics earlier in the week. Full commentary at Credit Writedowns Pro
This is a long-form post on Ukraine. The big news, however, is from the European Union where the PMIs and a slew of other economic data came out today. The data showed the European economy improving broadly from its weakened recovery status. This will give the ECB room to take a wait and see approach. At the same time, the EU foreign ministers met yesterday and, according to reports are ready to impose heavier sanctions on Russia in the wake of the downing of Malaysia Airlines Flight 17 over Ukraine. There’s a lot data to digest here so let me start off with the EU – Ukraine – Russia narrative.
The economic data out of the US and Spain yesterday were very good and support the idea that both of these economies are seeing recoveries that are accelerating. Some thoughts on the data below
Markit’s June Manufacturing PMIs for the Eurozone came out this morning. And overall, the numbers showed less strength across the board, with France showing particular weakness. You can see that Spain and Ireland were doing well though. Spain was at a 7-year high in fact. This is why I am bullish on Spain. The breakout in the economy is not […]
This is an abbreviated post from our subscription series at Credit Writedowns Pro. The European data out today were not particularly good. We saw a deceleration in the eurozone economy, that when combined with the deceleration in German inflation, suggests that deflationary forces could still threaten a debt deflationary impulse in Europe if an exogenous shock hits the economy. The […]
The Chinese property bubble is bursting
Chinese wage pressure is rising
Chinese search for oil has increased geopolitical tensions
The monthly employment situation summary for April 2014 was released by the US Bureau of Labor Statistics. And the headline numbers were terrific. The unemployment rate measured by the household survey fell to a cyclical low of 6.3%, below the Evans Rule threshold. Meanwhile, the establishment survey showed a net addition of 288,000 works to non-farm payrolls. The fact that […]
The Euro area composite PMI rose to 54.0 from 53.1, making it unlikely that the ECB will move against deflation in May The Chinese HSBC/Markit flash manufacturing PMI was up to 48.3 from 48.0. However, this still shows contracting manufacturing and means China is still rebalancing Yesterday on Boom Bust, the finance show I produce, Marshall Auerback gave a good […]
By Marc Chandler There have been three flash PMI reports today, and each was surprising. China and Germany surprised on the downside while the French surprise was on the upside. HSBC’s flash read on China’s manufacturing sector weakened for the fifth consecutive month. The flash March reading of 48.1 compares with the final February of 48.5. The forward looking new […]
As a confirmation of a significant downward adjustment to China’s growth, a battery of economic reports yesterday morning all came in materially below expectations.
– The big event today is the BOE’s Quarterly Inflation Report and the updated economic assessment and forward guidance; sterling is outperforming
– Carney indicated that the new forward guidance would look at a broader range of economic indicators, without being too specific
– Italian Prime Minister Letta was to announce a new coalition pact yesterday, but PD head Renzi withheld support
– Japan reported a dismal December machinery orders data, a proxy for capital investment
– China reported news that seemed, well, over the top
Today’s ISM manufacturing PMI number spooked jittery US equity investors, sending stocks sharply lower (with VIX climbing above 20). The headline number came in about 9% below expectations. It seems that some of the manufacturing softness is the result of the knock-on effects from the frigid weather we’ve seen earlier. If so, we should see a rebound in February. Whatever the case, the market reaction to the ISM numbers may be a bit premature.