3rd June 2014 - Global Economic Data Review
Global Market Data as of 3rd June 2014
FTSE 100 6,864.10 (+0.29%) Dax 9,950.12 (+0.07%)
CAC 40 4,515.89 (-0.08%) BEL 20 3,160.56 (+0.10%)
Madrid IBEX 10,827.40 (+0.27%) Zurich SMI 8,688.96 (+0.17%)
Moscow MCIEX 1,464.19 (+1.89%) Sydney ASX 5,499.20 (+0.46%)
Nikkei 225 15,034.25 (+0.66%) Hang Seng 23,218.69 (+0.59%)
Shang SSE Comp 2,042.74 (+0.15%)
Dow Jones 16,743.63 (+0.16%) NASDAQ 4,237.20 (-0.25%)
S&P 500 1,924.97 (+0.07%)
Asian indexes continued to perform with the Nikkei again seeing a second day of gains and closing out at two month highs. Markets were driven by good data out of the US and strong figures out of China. The Chinese services sector grew at its fastest pace in six months in May. Non Manufacturing PMI went from 54.8 in April to 55.5 in May. New orders were at eight month highs posting 52.7 for May as opposed to 50.8 for April. Business expectations also remained positive posting a score above 60. This along with the better than expected manufacturing data announced this weekend has given the markets confidence and we can be fairly confident that the remaining economic data later next week should solidify the fact that the Chinese economy is indeed performing better than many analysts predict. Export and Import data, along with trade balance and inflation figures are due next week and will be eagerly awaited. Bar any surprises we can expect to see confirmation that exports have returned to their usual levels and that their trade balance has regressed back to prior 2014 levels.
Markets in Europe are expected to open higher today despite poorer than expected PMI data for the Eurozone. Markits Eurozone Manufacturer Purchasing Managers Index was expected to be 52.5 according to analysts however it came in at 52.2 for May, down from 53.4 in April. Of the twenty three members only Holland expanded, however any figure over 50 is seen as expansion and this is the eleventh month of expansion in a row for the Eurozone. Ahead of Thursday's ECB meeting and inflation rate decision we will receive Core Inflation, Inflation and Unemployment data today, tomorrow is the Producers Price Index and the 2nd Estimate of GDP Growth. All this before Thursday's meeting in Frankfurt where it is expected that Mario Draghi will finally announce some stimulus package details. With inflation in the EU at 0.7%, well below its 2% target, many will expect a major announcement at the meeting regarding the ECB's benchmark rate.
The Dow Jones had its second back to back record close yesterday. Buoyed by positive manufacturing activity the indexes again posted excellent gains. The Institute of Supply Management's Manufacturing Activity Index saw 55.9 for May, well up from April's 53.2. There was some confusion however as when the data was originally announced a figure of 53.2 was posted, after three hours this was corrected and the relevant corrections made. It is a busy week for economic data in the US. Today we receive Factory Orders, Vehicle Sales and Global Manufacturing PMI, tomorrow is Balance of Trade and a host of ISM Manufacturing data and after the ECB meeting on Thursday we will see Payroll data and Jobless Claims. All in all, markets in the US have shown considerable optimism and a continued place for value. Should the ECB go ahead and announce a stimulus package that spurs the EU economy as they have promised, the US markets along with the rest of the major Global indexes will continue to move forward and run with the Bulls!
It's a fair statement that Thursday and the European Central Banks meeting is the most important factor for the markets this week and many an analysts is waiting with baited breath to see whether the rumours that have been circulating this past month will come true.
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