COMMENT: Weak Eurozone Manufacturing results contrasts with positive Asian Manufacturing data
June 23, 2014 6:54 am
European stocks declined on Monday, refusing to track gains in Asia overnight after PMI surveys from the Eurozone’s two economic power houses disappointed the market.
Eurozone Flash Manufacturing PMIs in June came in at 51.9 compared to consensus expectations of 52.2 and a prior 52.2 in May, weaker than market expectations with both Germany and France underwhelming with their readings.
The Stoxx Europe 600 Index slid by over half a percent while the FTSE 100 index was similarly lower by around as much. This followed PMI surveys out of Germany which fell short of expectations, dropping to an eight-month low.
The composite PMI of manufacturing and services edged down to 54.2 in June, from 55.6 in May and compared to expectations for a 55.5 reading. The private sector activity was still upbeat however, leaving the overall index pointing to a possibly better economic backdrop versus its peers.
That’s certainly the case with France’s PMI surveys out earlier which painted a picture of a stuttering economy - the survey there fell to a four-month low of 48.0 from 49.3 in May – a level below 50 signifies contraction while above, means expansion.
All in all, the data from the Eurozone certainly has not invigorated the market today, however, with the European Central Bank’s latest stimulus efforts, there are hopes that a broader recovery in the euro-area will maybe pick up momentum in the second half of 2014.
Overnight in Asia, stock markets rose following better-than-expected manufacturing data out of China and Japan, two economic powerhouses of the region. Tokyo’s Nikkei 225 rose 0.4% while Hong Kong’s Hang Seng Index jumped 0.5% in response to the improving data.
HSBC’s flash PMIs for China gained to 50.8 in June from 49.4 in May, beating market forecasts and moving into expansion zone for the first time in five months.
Meanwhile in Japan, Markit’s PMI for the country rose to 51.1 in June from 49.9, its highest since March, pushing the yen currency weaker but the Nikkei 225 index higher to possibly be on track for a sixth consecutive weekly gain.
Over in Australia, the national index and currency there rose on China’s improving PMIs as the country relies heavily on China for trading and consuming its commodities.
Looking ahead, US stock markets may move lower on the weakness in Europe with attention on data from the housing market due in the form of existing home sales.
European stocks declined on Monday, refusing to track gains in Asia overnight after PMI surveys from the Eurozone’s two economic power houses disappointed the market.
Eurozone Flash Manufacturing PMIs in June came in at 51.9 compared to consensus expectations of 52.2 and a prior 52.2 in May, weaker than market expectations with both Germany and France underwhelming with their readings.
The Stoxx Europe 600 Index slid by over half a percent while the FTSE 100 index was similarly lower by around as much. This followed PMI surveys out of Germany which fell short of expectations, dropping to an eight-month low.
The composite PMI of manufacturing and services edged down to 54.2 in June, from 55.6 in May and compared to expectations for a 55.5 reading. The private sector activity was still upbeat however, leaving the overall index pointing to a possibly better economic backdrop versus its peers.
That’s certainly the case with France’s PMI surveys out earlier which painted a picture of a stuttering economy - the survey there fell to a four-month low of 48.0 from 49.3 in May – a level below 50 signifies contraction while above, means expansion.
All in all, the data from the Eurozone certainly has not invigorated the market today, however, with the European Central Bank’s latest stimulus efforts, there are hopes that a broader recovery in the euro-area will maybe pick up momentum in the second half of 2014.
Overnight in Asia, stock markets rose following better-than-expected manufacturing data out of China and Japan, two economic powerhouses of the region. Tokyo’s Nikkei 225 rose 0.4% while Hong Kong’s Hang Seng Index jumped 0.5% in response to the improving data.
HSBC’s flash PMIs for China gained to 50.8 in June from 49.4 in May, beating market forecasts and moving into expansion zone for the first time in five months.
Meanwhile in Japan, Markit’s PMI for the country rose to 51.1 in June from 49.9, its highest since March, pushing the yen currency weaker but the Nikkei 225 index higher to possibly be on track for a sixth consecutive weekly gain.
Over in Australia, the national index and currency there rose on China’s improving PMIs as the country relies heavily on China for trading and consuming its commodities.
Looking ahead, US stock markets may move lower on the weakness in Europe with attention on data from the housing market due in the form of existing home sales.
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