PMI round up leading into the US session
New York (July 1) The manufacturing PMI data has been fairly decent so far in the Asian/EU session. It kicked off in Australia where the number beat expectations and recorded above the all-important 50 level. In China, the Caixin reading confirmed yesterday's main number by marginally falling below the analyst consensus but overall a decent number.
In the U.K., the report said "Manufacturing remained in a strong growth phase in June, with rates of expansion in output, new orders and employment among the best seen during the near 30-year survey history. The industry was still beset by supply-chain and distribution difficulties, however, leading to longer vendor lead times and disruption to production schedules.". There is clearly a bottleneck in the supply chain as certain important parts of Asia deal with the pandemic and it is clear they are not as far along as some of the more developed nations.
In Europe, the growth of the EZ manufacturing sector hit a new all-time during June, with the main PMI number setting a fresh survey record for a fourth successive month. After accounting for seasonal factors, the reading improved to 63.4, up from 63.1 in May and firmer than the earlier flash print.
Chris Williamson, Chief Business Economist at IHS Markit said "Encouragingly, there are several survey indicators which add to hopes that the current spike in prices will prove transitory. Widespread issues such as port congestion and a lack of shipping containers should soon fade as the initial rebound from the pandemic passes. Similarly, recent months have seen safety stock building as companies seek to protect themselves against potential future supply-chain disruptions".
Australia Manufacturing PMI 58.6 vs exp 58.4 prev 60.4
Chinese Caixin Manufacturing PMI (Jun) 51.3 vs exp 51.8 prev 52.0
German Manufacturing PMI (Jun) 65.1 vs exp 64.9 prev 64.4
U.K. Manufacturing PMI (Jun) 63.9 vs exp 64.2 prev 64.2
EU Manufacturing PMI (Jun) 63.4 vs exp 63.1 prev 63.1
Away from this BoE's Bailey confirmed much of the narrative by saying "there are at least three reasons why the increase in flation should be temporary". He did however noted that higher inactivity rates could boost wage inflation and that if inflation persists the bank will use monetary policy measures to bring it under control.
Now over to the U.S. to see how the ISM manufacturing number will play out. Expectations are for a marginal decline to 61.0 vs the previous reading of 61.2.
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