World – Markit released services PMI’s for July. After hitting a 5-month low in the prior month, the global index bounced back to 53.9, albeit remaining below the long term average. New orders and employment grew faster than the prior month. There were output gains in most OECD nations while emerging nations also registered decent increases. Service sector growth in China was at an 11-month high, while India and Russia returned to expansion mode. In contrast, Hong Kong and Brazil were in contraction mode.
In China, the final reading for Markit’s July manufacturing PMI came in at 47.8, the lowest in two years. Declines in orders led manufacturers to cut output at the fastest pace since November 2011.
Japan’s labour cash earnings surprisingly fell 2.4% on a yearon- year basis in June. The Bank of Japan, however, refrained from adding stimulus at its meeting this week, deciding instead to leave monetary policy unchanged.
The Bank of England also left monetary policy unchanged at its meeting this week. In the Eurozone, retail volumes fell 0.6% in June the first decline in three months. So much so that retail volumes ended up growing just 1.4% annualized in Q2, a sharp deceleration from the pace observed in the prior two quarters.
What we’ll be watching
Elsewhere around the world, the Eurozone will see the release of Q2 GDP results as well as an account of the last meeting of the European Central Bank. Similarly, the Bank of Japan will release the minutes of its last meeting this week. In China, July data on credit will be closely watched for clues about whether or not looser monetary policy by the central bank is having the desired impacts. July data on retail sales and industrial production will also be released in the world’s second largest economy.
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