production, construction and quarterly indices
In economic news in the US on Monday, Markit’s final manufacturing PMI for July will be announced at 3:45 pm (consensus 52.3), shortly before the ISM begins to produce the same month that will fall at 4 pm (consensus FactSet 52). Construction costs for the month of June will also be revealed at 4 pm (accepting + 0.2% compared to the previous month).
Debates continue over the Fed’s monetary policy and the impact of monetary policy on the economy in terms of inflation, as the United States enters a recession but the labor market remains healthy. According to CME Group’s FedWatch tool on Monday, the probability of an additional half-point increase on September 21, after the next monetary meeting, is 68.5%, against 31, 5% probability of a three-quarter increase. The federal funds rate is currently between 2.25 to 2.5%, after two increases of 0.75%.
We should also remember that the President of the House of Representatives in the US, Nancy Pelosi, is starting her “journey” in four Asian countries, without being sure about her visit to Taiwan, following warnings from China. On Sunday, the Democratic leader’s office announced that he is leading a congressional delegation to the region, a process that includes Singapore, Malaysia, South Korea and Japan, without the indication of Taiwan. Pelosi’s visit comes amid strained relations between Washington and Beijing. Chinese President Xi Jinping last week warned Joe Biden that Washington should stick to the one-China policy and that “those who play with fire will perish in it”. Biden explained to Xi that US policy on Taiwan has not changed…
Elsewhere in the world today, note that the indices of Asian manufacturing PMI (Japan and China) came out slightly less than expected in the last reading – but still at 50 and therefore in the expansion zone. German retail sales fell sharply in June. In the euro zone, manufacturing PMIs came out slowly, below 50, in Spain, Italy, France and Germany. PMI indicators in France and Germany came close to consensus, at 49.5 and 49.3 respectively. The final index in the euro zone is below 50, at 49.8 against the consensus of 49.6. Britain’s final CIPS index, on the other hand, settled on this 50-point limit, at 52.1, almost ‘in line’. Finally, the unemployment rate in Europe came out at 6.6% in June against the consensus of 6.7%.
Quarterly financial reports continue on Wall Street, after Amazon and Apple at the end of last week. On Monday, Activision Blizzard, Williams Companies, Devon Energy, Simon Property, Global Payments, Mosaic, Check Point Software, Loews, Pinterest, CNA Financial, Avis Budget or Leggett & Platt, will announce their latest results.