We’re seeing some more risk aversion on Wednesday ahead of the release of the June FOMC minutes, with PMI data throughout the day painting a slightly more gloomy picture for the economy.
Revisions in Europe were very modest, in the cases where we actually saw them, but they were to the downside and from already relatively depressed numbers. It’s clear that they point to a deceleration in the all-important services sector but that isn’t necessarily a bad thing if we ever want to see interest rates falling again.
Nor is it a bad thing that there appear to be signs of cost pressures slightly softening in the surveys which will be encouraging for central banks, albeit not nearly enough to tempt them into pausing just yet. But it could suggest we’ll see more concrete signs of progress over the coming months.
The data from China was no more encouraging, with the Caixin Services PMI falling quite markedly, further highlighting the challenging headwinds the economy is facing during its recovery from zero-Covid restrictions late last year.
