Stock-markets in Europe are lower this morning with investors concerned about an uptick in coronavirus cases in the U.S. and outbreaks in Germany.
- The IHS/Markit US Composite PMI increased to 46.8 in June 2020 from 37 in the previous month, a preliminary estimate showed. The reading pointed to the softest contraction in private sector activity in four months, as several firms and states began to reopen following the coronavirus lockdown measures. Both manufacturing output (PMI at 49.6 vs 39.8 in May) and the services sector (PMO at 46.7 vs 37.5 in May) shrank at slower rate. New orders declined at a softer pace despite many firms noting a rebound in demand and the downturn in export orders eased as key foreign markets rose their buying activity amid looser lockdown restrictions. Firms continued to cut workforce numbers, albeit at a modest rate. On the price front, input and output charges rose for the first time since February. Lastly, sentiment improved with the degree of optimism hitting a four-month high amid expectations of a fast economic recovery amid the reopening of states.
- The IHS Markit Flah US Manufacturing PMI increased to 49.6 in June of 2020 from 39.8 in May, beating market forecasts of 48. The reading still pointed to a small contraction in factory activity although it was the lowest in three months as businesses began to reopen on a larger scale after the coronavirus lockdown. Output and new orders fell at a slower pace and job shedding eased in June while backlogs of work continued to be reduced sharply. Alongside a boost to business confidence, which was reportedly linked to hopes of a swift return to pre-pandemic new order volumes, firms began to increase their output charges in an effort to pass on higher cost burdens to clients. The increase in output prices was the first such rise since February.
- The IHS Markit/CIPS UK Composite PMI rose 17.6 points to 47.6 in June of 2020 from 30 in the previous month and above market forecasts of 41, a preliminary estimate showed. It was the largest monthly increase since the series began in January 1998. Another fall service sector activity (PMI at 47 vs 29 in May) contrasted with a return to production growth among manufacturers (PMI at 50.1 vs 40.7). The easing of restrictions related to the coronavirus had a favourable impact on economic activity, with business operations gradually resuming in a number of sectors and staff brought back from furlough. Still, underlying demand remained very subdued and cutbacks to client spending had acted as continued drag on overall business activity. Finally, business expectations for the year ahead rebounded, with confidence reaching a four-month high in June.
- The IHS Markit/CIPS Flash UK Manufacturing PMI rose to 50.1 in June of 2020 from 40.7 in May, beating market forecasts of 45. The reading pointed to a small increase in manufacturing activity, the first in four months, due to higher volumes of production, linked to a partial reopening of manufacturing plants. However, total new orders continued to decline, with manufacturers often commenting on shortages of new sales to replace completed contracts. Survey respondents cited particularly weak demand across the automotive and aviation sectors. Business optimism was the highest since September of 2018 amid hopes of a sustained recovery in manufacturing operations from the slump in production volumes seen during the initial phase of the COVID-19 pandemic.
- The IHS Markit Flash Manufacturing PMI for Germany edged up to 44.6 in June of 2020 from 36.6 in May and better than market forecasts of 41.5. It is the highest reading in 3 months, due to the effects of easing coronavirus lockdown restrictions. However, the reading still pointed to a marked contraction in the manufacturing sector and the 18th straight month of falling activity. New orders, output and employment fell at a slower pace while stocks of purchases fell fasterand supplier delivery times stabilised, following the recent COVID-19-related supply chain disruption. Business expectations turned positive for the first time in four months in June but remained subdued by historical standards.
- On Tuesday: European stocks closed higher as reassurance from the U.S. about the phase one trade deal with China, and better than expected batch of economic data from the euro area helped offset concerns about the spread of coronavirus infections in the U.S. and several other parts across the world. US stocks mostly higher during trading, extending the upward move seen over the course of the previous session. Asian stocks fluctuated before finishing mostly higher after White House trade advisor Peter Navarro clarified that the U.S.-China trade deal remains in place and that his earlier comments had been taken out of context.
- Tuesday’s data below:
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