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’Flash PMIs and Germany’s bragging rights
Europe must grow its way out of this slump! It’s not enough to bail out profligate sovereigns and banks! Capital must be deployed to SMEs! Youth unemployment must be tackled! Fiscal discipline is not enough on its own!
Fire all engines!!
Markit Flash Germany PMI®
German private sector sees fastest growth for seven months in January,
PMIs kick market when down
German bond auctions failing, IMF non-announcements driving market sentiment, Spain paying through the nose to fund itself, credit spreads blowing out, Dexia dragging down triple-A France, eurobonds getting vetoed again,
Eurozone PMIs – Feeling gloomy
Markit Eurozone Manufacturing PMIs released on Wednesday have shown just how bad a start the fourth quarter has gotten off to. As the massive repricing (or rather, pricing-in) of political risk continues apace in financial markets,
UK GDP – As good as it gets?
From the Office for National Statistics on Tuesday:
GDP growth of 0.5 per cent in third quarter. A reasonable pace?
Not really. In fact, there’s good reason for thinking this is as good as it gets for some time to come.
A guide to China CDS
The final HSBC/Markit Economics’ China PMI for September came out today with a reading that was above the flash estimate, but still at a level that signals contraction. Also evident was a worrying increase in factory inputs inflation,
[Something for the weekend] Alliance… I’m not sure about this
– By Neil Collins –
I’m a shareholder in Alliance Trust. Its subsidiary, Alliance Trust Savings, is home to my (substantial) SIPP. The service from ATS is simple, cheap and exemplary, and I’d recommend it.
When Italian bonds trade as risk assets
Well, they’ve been trading like it since (ooh) July, but the relationship becomes really obvious on a day like Thursday, when fears of a global slowdown hit home again.
For example, European stock markets have fallen around 4 per cent,
Global slowdown alerts…
…in manufacturing (via Credit Suisse):
The August global manufacturing PMI index fell to 50.1 from 50.6 in July, the lowest level since June 2009. The deterioration also marks the sixth consecutive month of decline and the longest losing streak since 2008.
What price UK QE2?
File under faltering economic recovery.
Via Reuters, the UK manufacturing PMI survey for July:
-UK MARKIT/CIPS MANUFACTURING PMI 49.1 IN JULY VS REV 51.4 IN JUNE (REUTERS POLL 51.0), LOWEST SINCE JUNE 2009
- UK MARKIT/CIPS MANUFACTURING PMI NEW ORDERS INDEX 47.6 IN JULY,
China, nothing to see here
The HSBC/Markit flash China PMI for July fell below the 50-mark to 48.9. It was 50.1 in June, making the biggest fall since March 2009 and the first negative result since July 2010.
Whew.
(Cue some more slowdown/stagflation worries.)
The news apparently was a bit of a dampener on markets,
China’s Japan syndrome
For those wondering about the wider implications of Japan’s earthquake crisis, don’t go too far. Consider how it will impact China — the country’s top trading partner.
BNP Paribas took a closer look at the effects of ruptured trade flows between the two countries on Monday.
A week is a long time… for the UK economy
The 10-year gilt yield hit an eight-month high on Tuesday…
As has the five year…
And the two year…
Meanwhile the pound has moved higher against the dollar.
The main catalyst for those moves had been a very strong UK PMI manufacturing report for January.
From a three-speed Europe to a structurally-cracked eurozone
A recovering eurozone. Check. But not firing on all cylinders.
After its Thursday downgrade of Japan, Standard & Poor’s agency has published an economic research report on Europe. It’s headlined “The eurozone’s three-speed recovery continues to unfold,
[Wilmot's PMI tour] Postscript
Credit Suisse’s economists publish an excellent Global PMI chartbook, with details of all the different components, that is easy on the eye and highly informative.
It should be out later today. [here it is - ed.] But for me,
[Wilmot's PMI tour] Lest we forget
Here is the final heat map for November 2008.
And the final heat map for 2010.
Global warming!
BRIC by BRIC III
Just another way to underline the fact that the next innovations in growth are not really coming from the BRICs…
[Wilmot's PMI tour] Meanwhile, in Central Europe…
PMI New orders are looking pretty perky:
[Wilmot's PMI tour] BRIC by BRIC II
A slight disappointment from Brazil: PMI New orders were up 0.4 but still below 50. Potentially stabilizing, but no clear sign of rebound.
But then again, the Brazilian real is the most overvalued of all currencies in our real effective exchange rate universe – see chart below:
Macro Live 4: PMI wrap
FT Alphaville’s new feature, Macro Live — our periodic real-time chat about the US economy — returns on Wednesday, December 1.
We’ll be recapping the PMI releases from around the world in the last 24 hours,
Indicator wars
Ignore those slumping Chinese leading indicators at your peril! Or — a dose of bearishness on looking at the OECD’s leading indicators, courtesy of SocGen’s Albert Edwards.
Look away for now from that headline China PMI figure showing a seventh month of manufacturing expansion.
[Wilmot's PMI tour] The strongman of Europe
Yes, we really are talking about the UK.
UK PMI new orders jumped to 59.1, marginally above Germany! Export orders were up 1.6 points to 56.9.
Some good news for the chancellor on Wednesday morning.
[Wilmot's PMI tour] Euro Area – Strong core holds periphery up
The euro area PMI was a bit weaker than the flash estimate from last week, but new orders were still up in November by 0.6 points to 55.6, after rising nearly 2 points in October.
Despite all the current turmoil,
[Wilmot's PMI tour] Hola
Spain is out…
… and it’s not great news. New orders down 1.5 points to 49.6 and employment down too.
A big silver-lining though: export orders up nearly 2 points to 55.9, the highest since 2000.
[Wilmot's PMI tour] The trend continues
Same sort of messages from Turkey, Poland and Norway: New orders were up 3.2 and 1.7 points, respectively. Norway was basically flat.
Not going to move the global needle but reassuring consistency.
[Wilmot's PMI tour] Euro periphery
Clearly growth is not the only issue for Europe’s periphery, but, without growth, there is no good way forward. More on that later on Wednesday.
Irish PMI New Orders picked up slightly in November and were just in positive territory,
[Wilmot's PMI tour] Asia sign-off
One other encouraging sign from the Asian data: export orders are up around the region, mostly by several points. Not surprisingly perhaps, Japan is the one exception.
One less encouraging sign from Asia:
[Wilmot's PMI tour] BRIC by BRIC
So far the news from Asia is good.
Production in Japan and Korea looks set to bounce in the months ahead after a pretty poor run, while China looks likely to cool a bit after four steamy months.
After India and Russia,
[Wilmot's PMI tour] The Japanese swing
Ok, it is time to get started with the hard data…
The Japanese PMI actually came out last night — ahead of the rest.
Since March, Japanese PMI new orders and production have been heading rapidly south.
[Wilmot's PMI tour] Why PMI?
Why PMI?
Embarking on a global PMI odyssey may seem a little mad when Europe is in turmoil once again. But trust us, there’s method in our PMI madness….
As far as we are concerned, the cycle in global growth remains the single most important macro influence on equities,
[Wilmot's PMI tour] Guest editing for the day…
FT Alphaville is being taken over!
From midnight London time on Tuesday, Jonathan Wilmot, the chief global strategist at Credit Suisse’s investment banking division, will be in control of the site (again).