Eurozone manufacturing PMI cools on reduced output, orders

Reuters

The Caixin Purchasing Manager's Index - an indicator of conditions at small manufacturers - came in at 51.1 in the month, up from 50.4 in June as it marked a four-month high in July. The Australian monetary policy statement in the meeting is not expected to have a strong reaction on the Australian Dollar performance, as the RBA didn't present any hints suggesting new policy tightness and rates increase.

The French factory PMI rose marginally to 54.9 from 54.8 in June, but the score was well below the flash 55.4.

Why the two gauges diverged this time is debatable.

UK Manufacturing PMI: it is known that the manufacturing and services sectors are the drivers for UK economy. The strongest improvements in operating conditions were registered in Austria, the Netherlands and Germany, although of these nations only the Netherlands saw a faster rate of expansion (75-month high).

On the whole, while China's manufacturing sector has remained resilient, companies' outlook has now worsened or held steady since hitting a almost two-year high in February.

While economists caution against reading too much into the official PMI figures, which can be volatile, ANZ analysts said the infrastructure boost has more to run.

The PMI is a composite index, calculated as a weighted average of five individual subcomponents. Readings above 50 represent expansion while prints below 50 show contraction.

US Vice President: 'Georgia is our main strategic partner'
Georgia's PM stressed that Georgia-US soldiers stood shoulder-to-shoulder against extremism in worldwide peacekeeping missions. Vice President Mike Pence on Sunday assured USA commitment to the Baltic states in the face of Russian aggression.

The rising Caixin PMI cheered markets, helping them extend early gains on Tuesday.

Second-quarter GDP rose 0.6% quarter-on-quarter from the same period a year ago, helping drive the annual growth rate to 2.1%, compared with 1.9% recorded between January-March. Cost inflation has eased sharply since March's recent peak, and was the slowest in over a year.

BNP Paribas shares rallied 1.5 percent.

"PMI survey data indicated that the introduction of the goods & services tax (GST) weighed heavily on the Indian manufacturing industry in July", the report said.

Nomura's Mr. Zhao said there is no need to over-interpret the differences.

"New orders and output decreased for the first time since the demonetisation-related downturn". "I think we'll be a little slower in the second half".

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