US Pending Home Rebound Modestly

In another blow to recent efforts to stabilize the economy and provide a better outlook for growth, Chinese manufacturing remained in contractionary territory according to the overnight PMI figures. The Caixin PMI managed to rise to 48.6 from 48.3 prior while the China Logistics Information Center PMI figure slipped from 49.8 to 49.6 in a growing sign that further stimulus might be on the way. The Chinese Yuan has continued to weaken as per interventions by the People’s Bank of China. However, should the US raise interest rates in the coming weeks, it could force the US dollar higher and bring the Yuan up with it, decreasing the nation’s export competitiveness. Despite the softness in the economy, China did manage to see the addition of the Yuan to the IMF basket of SDR currencies alongside the US Dollar, British Pound, and Japanese Yen in another sign of the nation’s growing global influence.

Despite the European Central Bank’s mandate for price stability, consumer prices across the Euro Area continue to trend mixed with economies prominently displaying differing results. Italian preliminary consumer price figures have shown a surprising downtick with monthly deflation accelerating to -0.40% versus the 0.20% recorded in the month prior while annualized CPI slipped to 0.10% from 0.30%. Meanwhile, in Germany, the same preliminary results showed that CPI made several gains, meeting expectations of a rise from unchanged to positive consumer price inflation on a monthly basis while annualized inflation rose to 0.40% in a sign that the asset purchase efforts undertaken by the Central Bank are finally showing positive results. Efforts to expand asset purchases further in the upcoming meeting will likely lift equity benchmarks like the German DAX 30 even higher.