🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

Global Flash PMI Enters Downtrend, Opens Opportunity For Bonds

Published 06/25/2017, 12:32 AM
Updated 07/09/2023, 06:31 AM
US10YT=X
-

The latest round of flash manufacturing PMIs saw the "global composite" that we put together fall -0.40 to 53.8 which places it down -0.9pts from the peak in January this year. Within the results there was the ongoing divergence between America and Europe, with the Eurozone flash PMI +0.3 to 57.3 and the US flash manufacturing PMI -0.6 to 52.1 and Japan ranging along -2.1 to 52.0.

The results continue that ever so slight downtrend that began since the peak in January and helps reconcile the trading in the US 10-year government bond yield, although there does seem to be a bit of a gap opening up between the two series. If the DM composite PMI can hold up or even regain some momentum it would provide a fundamental catalyst to rising bond yields or at least open up a notable mispricing for bonds.

My view is that global growth should be able to hold up given strengthening global trade growth, rising consumer confidence, rising property prices in the major economies, improving industrial production and corporate earnings growth, and still broadly accommodate monetary policy. However you need to pay attention to the data and the leading indicators, particularly ones like this.

The "global flash manufacturing PMI" dropped slightly in June, which continues the slight but noticeable downtrend that began from the peak in January this year. It highlights the concerns I recently noted about the risks to the global growth outlook.

DM PMI Vs Bond Yields

As noted in a previous post, consumer sentiment is on the rise, and here's how it compares to the global flash manufacturing PMI. Note the divergence (albeit they don't always move together).

Consumer Vs Business Sentiment

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.