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Marketmind: Purchasing managers of the world, diverge

Published 21/04/2023, 05:35
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 11, 2022.    REUTERS/Staff
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A look at the day ahead in European and global markets from Tom Westbrook

A month-long risky-asset rally, in the absence of any further banks collapsing, seems to be running out of steam as economic data offers few excuses for confidence.

Softening second-tier data in the U.S. on Thursday put a bid under bonds for the first time in a few weeks, while bitcoin was clobbered. Purchasing manager's index data are the next set of economic figures due as market focus flings back on growth.

British and euro zone manufacturing surveys are seen stuck in contraction territory.

China posted stonking export growth in March, but surprised analysts think that's a one-off. Chinese manufacturing, which can be a leading indicator for Europe and elsewhere, is slowing.

Export orders out of tech bellwether Taiwan have nose-dived.

It's a different story on the services side, where robust readings have been taken as signs of strong demand, inflationary pressure and another reason to take interest rates higher.

European and British services PMIs are seen steady and staying in expansion mode. British retail sales are expected to fall, adding up to a somewhat confounding picture.

Asian markets were in caution mode through Friday, and MSCI's Asia ex-Japan index headed for its worst week since Silicon Valley Bank failed six weeks ago.

Japan itself is looking interesting, with the Nikkei an outlier and hitting an eight-month high as it rides a wave of investor hopes that the world's third-biggest stock market might be in the process of awakening from decades of slumber.

Japanese core inflation also hit its highest since 1981 and has pressure on the central bank to pare back its ultra easy policies. The Bank of Japan meets next week.

Key developments that could influence markets on Friday:

Data: Eurozone, UK and U.S. PMIs, British retail sales

© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 11, 2022.    REUTERS/Staff

Speakers: Fed's Cook, ECB's de Guindos

Earnings: Proctor and Gamble, Regions Financial, Schlumberger (NYSE:SLB)

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