Today, we get the preliminary Markit PMI manufacturing index for August for the US. In July, the index climbed to its highest level since October 2015, indicating that the manufacturing cycle has turned since the low of early 2016. The ISM manufacturing index tells the same story. The PMI new orders index rose in July, indicating that the overall index has increased in August. We do not see the index climbing further rather expect it to stay around the current level.
We will also see new homes sales data from the US this afternoon.
In the euro area, the week starts with consumer confidence figures for August on Tuesday. We think consumer sentiment was negatively affected by the rising oil price throughout the beginning of August and the post-Brexit vote uncertainty, although this is diminishing. However, in our view, the continued solid labour market conditions and resilient business sentiment are likely to pull consumer confidence upwards slightly.
Euro area PMI figures for August are also due for release. The figures showed resilience to the Brexit vote in July, with only a small decline. Looking at the August figure, the ZEW investor expectation survey showed a small improvement in line with the overall market sentiment and we therefore expect the PMI to remain around its July level in August.
To read the entire report Please click on the pdf File Below