The composite PMI remained broadly unchanged in November (52.4 compared to 52.5 in October), which is well above the neutral level of 50. This suggests that growth in the short run remains decent despite significant global headwinds
Even without ground control calling, German optimism has been brought down by a mix of US tariffs, a stronger euro and the political inability to combine fiscal stimulus with growth-enhancing reforms
In August, France’s business climate index remained stuck at 96 for the third consecutive month. While stable, it continues to hover below its long-term average, a sign that the economy is holding its breath rather than gaining momentum
On a day when all eyes are once again on the war in Ukraine and with another crucial meeting later today at the White House, just-released trade data serves as a good reminder of the adverse effects of the ongoing trade tensions.
Stocks ended sharply down as investors remained cautious ahead of the Federal Reserve’s monetary policy decision. Treasury yields fell on strong demand for 20-year bond auction. The dollar weakened further, while gold hit a new record high. Oil prices eased as Ukraine peace talks offset Mideast instability worries.
At the same time, the US dollar is being negatively affected, especially since its nominal effective exchange rate suggests the currency is overvalued. The US dollar is penalised by concerns over US growth, with an increased risk of stagflation taking hold in the United States.
While simmering trade tensions have been a key driver of FX markets this year, optimism about a potential ceasefire deal in Ukraine and stronger fiscal support, especially from defense spending, have also raised the prospects of a better outcome for European growth.
While simmering trade tensions have been a key driver of FX markets this year, optimism about a potential ceasefire deal in Ukraine and stronger fiscal support, especially from defense spending, have also raised the prospects of a better outcome for European growth.
