The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Global Mid-Day Report: Not much calm Before the Storm

To set the morning in context, PMIs at Spain and Italy dropped as PMIs at UK, France and Germany hit a new low at near 45 in all three Continental majors. Manufacturing PMI rolls like moss going up the hill, Spain comes in at 42, Italy at 44, FRench and German at 43, Eurozone at 44 and Czech at 49 with even the UK islands falling to 45 for June.  China and india export orders dropped and the mornings PMI data from Asia was also put in question, but irrespective of hat you hear, India, China and Singapore reported bullish PMIs today except for their partnership with the Eurozone and though the Soputh Korean trade surplus fell, the Korean IIP as also in Japan were tracking higher esp with neighbour China reporting a bigger jump than usual on the HSBC MarkIT survey,. The official Chinese PMI did end at its six month low but then itdoes report too many more state sponsored organisations and inventories and PPI are still weak in Chinese surveys. then the US ISM Manufacturing indices also came in at 49.8 and the Manufacturing PMI came in at 51.4, China probably increasing its trade with the US along with India as US trades report later in the week

The Eurozone and indeed the London Olympics hosts are fast being sucked into the whirlpool as markets prescribe a big dose of liquidity to bring back the music. As you must know, we all wait for near cascading announcements from ECB and the Fed. Later this month, the global OECD Central Bankers meet for the annual tete a tete at Jackson hole and September still leaves enough time for Ben Bernanke to muscle in a critical decision or two in the election year. As of now, the obvious would be to focus on global corporate earnings and when if at all they would be improving in Europe. Coke did not do badly in the second quarter and McDonalds hung in there too but others were not so bright and cheerful while the automakers might as well drop the Continent for the next three years’ plans in the Boardroom, struck by underwater mortgages and a bad bubble that is eating up current and future GDP of the Eurozone.

Spain meanwhile refused to ask the EFSF/ESM combine explicitly for a bailout, leaving some conservative hope inthe belly while hanging on is never a good idea by itself.

US Car Sales outlook remained at 14 mln automobiles for 2012, with imports keeping a higher share at more than 3 mln till now but Europena carmakers are headed for the shock they did not ask for when China’s sales come in ever lower and luxury Car sales do not turn out to continue the success parade from where they left off in 2011 Construction remained positive if not upbeat in the US up 7% on year for June data and Private Payrolls got another vain shot int he arm from the wannabe ADP Payrolls report at 163,000 but the BLS report on Friday may not oblige.

Another bright spot in US data was a 6 mln drop in crude inventories and a more than 2 mln drop in retail Gasoline inventories. But Brazil continued to struggle ith a 5% further contraction in Industrial Production even as South Africa crossed the 50 mark barely into Expansion for June led by growth in retail sales. Swedish PMI also crossed into expansion for June at 50.6. The ECB decision rolls in an hour of US opening tomorrow and the FOMC starts off the ticking off real options still on the table at 1415EDT


Enhanced by Zemanta


%d bloggers like this: