Strong PMI data globally - Westpac

Elliot Clarke, Research Analyst at Westpac, points out that in the world this week, PMI data was the focus and for the US, it was unequivocally strong.

Key Quotes

“Most notable was the ISM manufacturing survey at a 14 year high on broad-based strength.”

“For China, while external demand has softened, domestic orders have held up well, particularly given the marked deterioration in investment growth. Important for aggregate activity, employment growth has also shown resilience. Indeed, the official NBS PMI’s have reported an acceleration in employment growth of late (though we must caution that the Caixin measures, which focus on smaller firms, have reported the opposite).”

“In the rest of the Asian region, India and Indonesia were shown to be carrying strong momentum at June as they come face to face with multiple headwinds related to emerging market capital flight; consequent monetary policy tightening; and the ill effects of higher inflation on discretionary household incomes.”

“The region has a bumpy road ahead of it, but structurally speaking, they are well placed to weather the storm. Speaking of which, the coming week is likely to see an announcement made by the Trump administration on the next round of tariffs (on $200bn of imports from China). Ahead of this, China has again emphasised they will respond to any intensification of hostilities.”