The composite PMI remained broadly unchanged in November (52.4 compared to 52.5 in October), which is well above the neutral level of 50. This suggests that growth in the short run remains decent despite significant global headwinds
Chinese equities hit a fresh three-year high, while India's Nifty 50 rebounded on Monday after President Xi Jinping and Prime Minister Narendra Modi attended a weekend summit in Shanghai alongside leaders from Russia, Iran and Turkey. The meeting focused on strengthening ties among emerging markets in the face of what participants described as aggressive US trade policies.
The just-released minutes of the ECB’s July meeting show that the central bank entered the summer break with a strong feeling that the job was done and that the bar had been set high for another rate cut. Still, this wait-and-see stance had at least a touch of an easing bias
August confidence indicators paint a picture of economic inertia, with growth momentum still concentrated in the services sector
The Euro area composite flash PMI improved to 50.4 in March (vs. 50.2 in February), a touch below consensus and close to our own expectations. The improvement was led by the manufacturing output index, which increased by 1.8pt to 50.7, the highest level in more than three years, while the services activity index edged down slightly to 50.4.
The US imposed steel and aluminium tariffs which sparked a response from the EU. The emerging trade tensions saw Asian equity markets close lower.
A potential ceasefire in Ukraine added support to European equities despite rising trade tensions between the EU and the US with the EU announcing retaliatory tariffs.
A weak than expected US CPI print saw the sell off in bonds continue in the US and oil prices rise.
Metals prices lifted over concerns of tariffs and tight supply.
Positive growth impulse in Europe counters tariff hit to Asia The pick-up in risk aversion at the start of this week amongst market participants has triggered a correction lower for emerging market currencies. The CLP (-1.7% vs. USD), COP (-1.2%), BRL (-1.1%), IDR (-0.9%) and THB (-0.7%) have weakened the most since the end of last week while the Central European currencies of the CZK (+0.3% vs. USD) and HUF (+0.1%) have continued to outperform.
Stocks finished lower amid escalating trade war concerns. Longer-dated Treasury yields rose, reversing earlier declines, after German debt brake deal. The dollar slipped, while safe-haven gold gained. Oil prices hit 6-month low on OPEC+ output increase announcement and pause in Ukraine aid.
While simmering trade tensions have been a key driver of FX markets this year, optimism about a potential ceasefire deal in Ukraine and stronger fiscal support, especially from defense spending, have also raised the prospects of a better outcome for European growth.
