The PMI trend continues today, with tons of reports in the schedule.
Australia’s June manufacturing PMI came in at 58.6, lower than the previous month. The balance of trade down under was also disappointing.
Japan published several of its Tankan surveys for the second quarter of the year today, where only the all-industry capex was positive. The manufacturing outlook, as well as the indices on manufacturing and nonmanufacturing industries all failed to meet the forecasts, indicating that the Japanese economy is really not in good shape right now.
In Europe, there were manufacturing PMIs from Spain and Germany, which exceeded investors’ expectations, and one from Italy, which met the prediction exactly. The overall eurozone manufacturing PMI was also better than investors had expected.
The PMI report from the United Kingdom was disappointing, coming in at 63.9 against a forecast of 64.2.
There will also be manufacturing PMI reports from the United States today.
Aside from this data, Italy and the eurozone as a whole both reported lower than anticipated unemployment rates. With that in mind, Europe might appear more stable than expected, which will result in a stronger euro.
Furthermore, since today is Thursday, investors will also be curious about the jobless claims reports from the United States. Still, these will likely evoke a muted response because the far more important June nonfarm payrolls will be out tomorrow.
Another important event today is the meeting of OPEC and its allies (Russia & co). They will be deciding whether to keep increasing their oil export quotas. Normally, it was expected that some kind of increase would come out of this meeting, but now some OPEC+ members are apprehensive about the impact of the Delta variant of Covid-19 on the global demand for oil, especially if new lockdowns are necessary around the world.
China is also once more muddying the waters. Celebrating the anniversary of the Communist Party, President Xi Jinping spoke about “reunification” with Taiwan. This raised concerns that China might be preparing to take action against Taiwan similar to what it did in Hong Kong recently to attempt to bring it into its territory. Another confrontation with the United States over Taiwan is very possible.
