Daily Update - 3rd July 2018
Eurozone PMI manufacturing was finalized at 54.9, revised down from 55.0. That’s also an 18-month low. Markit noted that growth of output and new orders slowed further as upturn in new export business remains subdued. UK PMI manufacturing rose 0.1 to 54.4 in June, above expectation of 53.5. Markit noted that output growth slowed from May’s give month high. Meanwhile, input cost inflation picked up, leading to increased selling prices. The BoJ’s quarterly Tankan survey showed notable worsening in manufacturer’s sentiments in Q2. Japan PMI manufacturing was finalized at 53.0 in June, revised down from 53.1. Joe Hayes, Economist at IHS Markit noted that “Japan manufacturing PMI data continue to signal that the sector’s current expansion phase still has legs. Output growth edged up in June, supported by further inflows of new work and an accelerated rate of employment growth.” However, “concerns do remain however, as new order growth eased to a ten-month low and export sales decreased for the first time since August 2016. Moreover, with input price inflation jumping to a three-and-a-half year high, manufacturers may be forced to absorb higher cost burdens in order to remain competitive, particularly if the yen faces further safe haven demand.” On Tuesday, a bullish AUD is expected for a hike in interest rates and bearish trend if the RBA decides to go on with the ongoing interest rate. In a stressed UK economy, construction reports are an indicator of the business conditions in construction sector. The Factory orders, which can offer insight into inflation and growth in manufacturing sector of US economy will add to the strength of dollar if it is positive. ECB Executive board member Peter Praet’s speech today should indicate the monetary policy of EU. Also, PMI construction index for the month of June is coming out from UK. Yesterday’s Market
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