Marketmind: Can PMIs reprise their April surprise?
12:34 am Tuesday, May 23rd, 2023
A look at the day ahead in European and global markets from Tom Westbrook
Last month, better-than-expected PMI surveys helped pep markets’ mood and kept stocks levitating near recent highs.
This time, economists are expecting another bullish take on the world from supply-chain managers and for services to again make up for lacklustre manufacturing. European and British surveys are due out in the morning.
Asia, however, offered a mixed entree and perhaps a warning.
In Japan, manufacturing activity expanded for the first time in seven months while services hit record growth – cheery enough to encourage the rolling juggernaut that is the Nikkei to flirt with a ninth consecutive session of gains.
Even that remarkable winning streak has been par for the course this year, though, after a similar run in March that now has the benchmark up 19% for the year and at 33-year highs.
A warning, however, came from Australia, where services growth slowed on the heels of an unexpectedly weak jobs report last week.
Australia’s currency has gone sideways for three months and its gains in January – when hopes ran high for China’s reopening – have vanished. Aussie stocks are likewise in the doldrums as worries over demand hold down the iron ore miners and a margin squeeze weighs on the banks.
U.S. surveys are also due on Tuesday, although the focus there is firmly on the debt ceiling talks which are so far just that – talks – without a deal and with fewer than 10 days left until the government runs out of money.
Key developments that could influence markets on Tuesday:
Economics: U.S., Eurozone and British PMIs
Speakers: BoE’s Pill, Mann and Tenreyro appear before lawmakers. ECB’s de Guindos, Villeroy and Enria
(Reporting by Tom Westbrook; Editing by Edmund Klamann)
