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Global Manufacturing PMI Data Rolling in To Start August

Pound Under Pressure Ahead of PMI

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Although sentiment still remains fairly bearish towards the Pound in the post-Brexit market environment, anticipation of any positive data for the UK remains favorable for the Pound’s disposition. The upcoming UK Manufacturing PMI will provide further evidence as to the state of the economy in the wake of the “leave” decision. The UK PMI has been trending in contractionary territory since April of this year with a reading of 51.0. Since then, the Brexit referendum has come and gone and the dust is beginning to settle, hurting the outlook for many sectors of the economy as the impact is still yet unknown. The PMI data for July is set to be released later today is expected to result in a figure that matches the previous month at 49.1. Any bullish reading for the manufacturing sector will be a good sign for the United Kingdom and the Pound post-Brexit.

Chinese Manufacturing Sector Expands for the First Time is 18-Months


For the first time in over a year, the Chinese manufacturing sector is showing signs of life and expansion. According to the Caixin PMI, the manufacturing sector in China showed modest expansion during July with a reading of 50.6, just above the threshold that separates growth from decline.  The Chinese HSBC Manufacturing PMI is computed based on a monthly survey of approximately 430 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. However, this is not necessarily a clear indication that the Chinese manufacturing sector is out of the woods yet, with the latest growth metrics barely over the critical 50.0 level that indicates expansion.

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Japan Manufacturing Sector Improvement Spreads Optimism of Further Normalization


All eyes are trained on the Japanese economy following the announcement of expanded fiscal stimulus which was met with disappointment from the Bank of Japan following the decision not to cut Interest rates or greatly expand its own monetary stimulus measures. With all fundamental data being scrutinized in Japan this month, the latest results from the Japanese manufacturing sector give a sense of optimism amongst market participants that the tide may finally be turning in policymakers’ favor. During July, the sector showed a slight improvement, printing at 49.3, which was above the 49.0 forecast. While a positive step towards further normalization of economic activity, it remains a far cry from the benchmark 50.0 threshold that indicates expansion.

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