Mixed PMI's ahead of the U.S. open
PMI's in Europe have once again impressed leading into the U.S. market open. The Eurozone number itself came in at 61.4 vs analyst expectations of 61.5 marginally missing out. The report itself said that manufacturing growth slowed to a size month low. It noted, "The euro area manufacturing sector registered another marked expansion during August, latest PMI data showed, although momentum waned once again as the headline index fell to a six-month low.". Some important nations noted slower expansions with the likes of Germany, Ireland, Austria, and France noting slower growth. The Netherlands was the best performing although it also moved to a 5 month low.
In the U.K. once again rising supply chain constraints lead to slower production growth and rising input prices in August. The report said shortages of inputs and delivery delays disrupted production schedules, leading to slower output growth, and also resulted in marked increases in input prices. Things like building materials including lumber and cement are hard to get hold of at the moment and some construction projects are having to be delayed. Despite this Rob Dobson, Director at IHS Markit said "Business confidence remained elevated despite the widespread shortages as firms focused on the longer-term outlook and brought back furloughed workers. However, the solid jobs growth seen in August could soon wane if supply disruptions and shortages of both labor and required skills continue to worsen.”
Obviously, the Chinese number disappointed markets overnight. The manufacturing sector has moved back into contractionary territory in the nation. The PMI measure of the services sector plunged into negative territory as a recent outbreak of Covid-19 weighed on activity. Some analysts suggested the clampdown by the Chinese government on the property sector is a reason for the PMI fall. The government has asked companies to lower leverage and debt levels which means fewer projects can be put in place for the time being. Later in the session, we will be looking out for the U.S. ISM reading. Economists are looking for 58.6 lower than the last reading of 59.5.
UK Manufacturing PMI (Aug) 60.3 vs exp 60.1 prev 60.4
EU Manufacturing PMI (Aug) 61.4 vs exp 61.5 prev 62.8
German Manufacturing PMI (Aug) 62.6 vs exp 62.7 prev 65.9
French Manufacturing PMI (Aug) 57.5 vs exp 57.3 prev 58.0
Italian Manufacturing PMI (Aug) 60.9 vs exp 60.1 prev 60.3
Indian Nikkei Markit Manufacturing PMI (Aug) 52.3 vs exp 55.0 prev 55.3
China Caixin Manufacturing PMI (Aug) 49.2 vs exp 50.2 prev 50.3
Australian Manufacturing PMI 52.0 vs prev 56.9
Japanese Manufacturing PMI (Aug) 52.7 vs prev 52.4
By Rajan Dhall
For Kitco News
Kinesis Money the cheapest place to buy/sell Gold and Silver with Free secure storage
David