PREVIOUS TRADING DAY EVENTS 23 June 2023

The 23rd of June was PMI Friday. Flash Figures for both the Manufacturing and Services sectors were released showing U.K. and European PMIs plunged with U.S. PMI preliminary for June expected to decline for both sectors. 

Eurozone business growth fell for the month as a manufacturing recession deepened. Germany, the biggest economy, outperformed on services while France was a big drag with a services PMI of 48. Manufacturing activity has been in decline since July and the downturn deepened.

This speaks against a recovery of the economy in the coming months, which is expected by many, Commerzbank economist Christoph Weil said. We see our assessment confirmed that the euro area economy will contract again in the second half of the year. 

The so far 400 basis points of ECB rate hikes are increasingly slowing down the economy, he added.

But economic activity is significantly lower and weak enough for the EU to fall into recession with ECBs aggressive hikes. The jobless rate is low and nominal wage growth is at its highest in decades. Most policymakers, though, fear inflation more than a recession. The ECB stated that it will hike again in July.

Another quarter of negative GDP growth is not unimaginable, although the current slump clearly remains mild enough for the European Central Bank not to change course on rate hikes, ING economist Bert Colijn said.

Britains PMI for both sectors also fell more than expected. The…