PREVIOUS TRADING DAY EVENTS 24 July 2023

PMI releases yesterday Eurozone and U.K. PMIs were all reported weak during the morning across Europe. German Manufacturing in particular was at 38.8, which is the worst figure since May 2020! U.K. Manufacturing remains firmly in contraction at 45.0 vs. 46.5 last time and Services at 51.5. The U.S. PMIs were also reported weak. The manufacturing beat expectations but remained in contraction.

The survey suggested that Eurozone business activity shrank in July as services demand declined while factory output fell at the fastest pace since COVID19. Germany and France are both in contractionary territory and the figures raise recession fears. The figures for both countries were worse than predicted. 

Activity in Germany especially, Europes largest economy, contracted in July, increasing the likelihood of a recession in the second half.

There is an increased probability that the economy will be in recession in the second half of the year, Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said of Germany. Over the last few months, we have seen a jawdropping fall in both new orders and backlogs of work, which are now declining at their fastest rates since the initial Covid wave at the start of 2020. This doesnt bode well for the rest of the year.

The weakness was widespread across all sectors, but it was the manufacturing sector that posted another bad reading, said Paolo Grignani at Oxford Economics. Todays print…