Market Activity Muted by U.S. and Canadian Labor Day Holidays, But Manufacturing Purchasing Manager Surveys Reported for Many Other Economies – Currency Thoughts
Market Activity Muted by U.S. and Canadian Labor Day Holidays, But Manufacturing Purchasing Manager Surveys Reported for Many Other Economies
September 2, 2024
The dollar climbed 0.5% against the Japanese yen, but the weighted DXY dollar index is unchanged.
Equity indices have edged 0.1% lower in Germany, France, Italy, Great Britain and Spain. Greater volatility was experienced in Asian share prices including gains of 1.1% in China, 0.9% in New Zealand, and 0.6% in Singapore but also a 1.7% slump in Hong Kong’s Hang Seng index. U.S. and Canadian markets will be closed for Labor Day observances.
Ten-year sovereign debt yields increased overnight by 7 basis points in Italy, four bps in Great Britain, 3 bps in Germany and 2 basis points in Japan.
The price of bitcoin rose 1.8% so far this Monday, but oil and gold prices are barely changed.
Despite a marginal upward revision, Euroland’s manufacturing purchasing managers index printed at a depressed 45.8 for a third straight month in August. A 50 score on a PMI represents the boundary between improving and deteriorating business conditions, and the further away the score is from 50, the steeper is the rate of change. Euroland’s manufacturing PMI has dwelled below 50 for 26 straight months, and August’s survey including a more pronounced slide in factory orders and the first rise in output prices since February 2023. Among individual euro area member PMIs, only Ireland’s was both above 50 (50.4) and better than its July reading. The weakest reports were from Euroland’s largest members, a 7-month low of 43.9 for France and a 5-month low of 42.4 for Germany. Summing up the state of manufacturing in the euro area, the report said “manufacturing is going downhill and fast” and concluded no likely upturn for quite a while longer.
The Chinese government’s proprietary manufacturing PMI fell to a 6-month low of 49.1, while a privately compiled manufacturing survey produced a 2-month high of 50.4. Either way, conditions are pretty stagnant, while the government’s non-manufacturing PMI rose just 0.1 point above July’s 8-month low of 50.2.
Japan (a 2-month high of 49.8) and Australia (a 3-month high of 48.5) had similar manufacturing purchasing manager indices in August.
Among other PMIs from Asia, manufacturing growth in India improved at a solid rate last month but more slowly than in June of July with a score of 57.5. Factory conditions continued to improve in Taiwan with a 3-month low of 51.5, South Korea with a 2-month high of 51.9, the Philippines with an unchanged PMI score of 51.2, and Thailand with a 2-month low of 52.0. Alternatively, the PMI’s from Malaysia that matched July’s 49.7 and Indonesia (a 36-month low of 48.9) were on the south side of the 50 level separating improvement from deterioration.
Likewise, sub-50 PMI readings for August occurred South Africa (a 7-month low of 43.6 according to the Absa-compiled survey) and Turkey (a 7-month low of 47.8).
Russia’s manufacturing PMI slid 1.5 points in August to a 13-month low of 52.1. Elsewhere in Eastern Europe, Hungary’s PMI dropped to a one-year low of 47.8, the Czech PMI rose to a 1-year high of 46.8 that was still well south of 50, and Poland’s PMI advanced half a point to a 5-month high of 47.8.
In the Nordic region, Sweden‘s PMI rebounded 3.5 points to a 2-month high of 52.7, but the Norwegian PMI gave up 7.7 points to a 2-month low of 52.1.
One of the pleasanter PMI developments in August involved Switzerland, where the manufacturing index unexpectedly increased and by 5.5 points to a 19-month high of 49.0.
But Brazil’s factory PMI sank 3.6 points to an 8-month low of 50.4.
A number of economies released second-quarter GDP figures. Italy confirmed the preliminary report that had estimated a 0.2% quarter-on-quarter growth rate along with a 0.9% five-quarter high year-on-year pace.
GDP in Cyprus went up 0.7% on quarter and by a two-year high 3.7% when compared to a year earlier. In nearby Turkey, however, real GDP only edged up 0.1% between the first and second quarters, resulting in the weakest year-on-year growth rate (+2.5%) since a 10.4% plunge in the second quarter of 2020 when the Covid pandemic was raging.
Australia had two other bits of data news, one good but the other not. The good news was a 10.4% monthly rebound in building permits during July that more than offset a 6.4% dive in June and resulted in the most permits since the start of 2023. The bad news involved business profits that contracted 5.3% on quarter and 3.9% on year during the second quarter.
Consumer price inflation in Indonesia held steady last month at July’s 30-month low of 2.1%, down from a peak of nearly 6% in September 2022. In Kazakhistan, CPI inflation of 8.4% in August was at a 2-month low and down from a peak of 21.3% in February 2023. Pakistan also released consumer price data, a rise of 0.4% in August from July associated with a 39-month year-on-year low.of 9.6%. That’s roughly a fourth as much as the peak of 38% in May 2023.
Italian producer price inflation was less negative at -1.1% in July than -2.5% in June, -3.5% in May or -16.0% in December 2023, but it’s still a far cry better than the peak of 41.8% in September 2022.
Dutch and Swiss retail sales in July posted similar year-on-year advances of 2.6% and 2.7%, respectively.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Manufacturing PMIs
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