Hello, and welcome to our rolling coverage of the world economy, the financial markets of the euro area and the company.
Some upbeat economic news from China was encouraging for the investors on the last day of June, boosting optimism that the global economy is turning the corner.
China, the factories have increased at a slightly faster pace this month, according to china’s National Bureau of Statistics. Its Purchasing manager’s Index rose 50.9 from 50.4 in May (anything above 50 indicates growth).
This is the fourth month of the (modest) growth in a row, China has emerged from the lockout imposed to curb the spread of the Covid-19 in January and February.
The chinese manufacturers have reported that supply and demand are beginning to pick up, leading to more new orders. However, new export orders are still down, meaning of the factories are still cutting jobs.
In a statement, NBS official Zhao Qinghe said that there was still much uncertainty about the economic outlook, with smaller Chinese companies find it particularly difficult conditions.
The Services companies have also strengthened, with the official non-manufacturing PMI up 54.4 in June of 53.6 in the month of May. This is the best reading of the year.
Julian Evans-Pritchard, the senior China economist at Capital Economics, explains:
“The latest survey data suggest that economic growth accelerated in June thanks to a faster recovery in the manufacturing sector and services, alongside the continued strength of construction activity,
The recovery is expected to remain robust in the coming months as large infrastructure spending offsets external weakness.”
Following an unexpected surge in US home sales on Monday, which can strengthen the hope that the global economy may be tried of the emerging coronavirus slump.
The european stock markets are expected to rise a little this morning, at the end of one of the best quarters in decades.
According to my estimates, the The FTSE 100 index has gained almost 10% since the beginning of April – its best quarter since 2010. Europe The Stoxx 600 has increased by more than 12% during the quarter, the best since 2015, while Wall Street has experienced its largest increases since 1998.
Surprising, really, given that the world is still plagued by the Covid-19 pandemic. Clearly unprecedented stimulus from central banks reassured investors, even if a V-shaped recovery seems rather unlikely.
And most markets are still deeply in the red for the year as a result of the accident, in February and March.
The order of the day
- 10am BST: eurozone, core inflation for June, and is expected to remain at 0.8%
- 11am BST: the Bank of England’s chief economist Andy Haldane speaks of the economic impact of Covid-19
- 1.30 pm BST: Canadian GDP for April – is expected to decrease by 13
- 2pm BST: S&P/case-Shiller index of us home prices
- 5.30 pm BST: US secretary of the treasury, Steven Mnuchin, chairman and president of the Fed’s Jay Powell appear before the Congressional committee on financial services