Earlier today China published its manufacturing PMI for August, which came in at 50.1, narrowly missing the forecast of 50.2, which in either case would have been lower than the previous month’s number.
Although a result over 50 indicated economic growth rather than contraction, the report is dangerously close to that border. It was disappointing to investors, who expected that despite the Covid-19 lockdowns in China, August will have a slightly better PMI in the end.
The next major reports of the day came from Germany, which published labor market data. In August the unemployment change report amounted to -53K, which is considerably better than the forecast. In addition, the unemployment rate fell to 5.5% (the forecast was 5.6%), also pleasing investors.
Fellow EU member Italy published its final GDP growth rate number for the second quarter of 2021, which met the forecasts exactly.
Moreover, Italy and the eurozone as a whole published inflation numbers as well, which were all better than investors had hoped.
There were GDP growth rate reports from Canada today too, which were somewhat disappointing. The Canadian economy grew at an annualized rate of -1.1% in Q2, while growth of 2.5% was expected.
Later today we expect the CB consumer confidence survey for August from the United States.
The coronavirus pandemic remains one of the leading topics even today, as the most affected countries in the world are moving ahead with travel bans on each other. Both the EU and the US will now only permit fully vaccinated travellers from high-risk countries.
The stock value of US and European airlines will likely take a hit over the next few days as a result of the travel restrictions.
US stock indices are set to do well today due to the dovish statements of the Federal Reserve last week, which meant that the Fed will not begin a sharp monetary policy tightening soon.
Meanwhile, the United States has reportedly finished its evacuation campaign in Afghanistan. Today is the final deadline for US troops and US allies to leave the country which is now under full Taliban control. So far the geopolitical conflict in Afghanistan has not had an impact on the financial markets, due to other events taking precedence.
