Trump Trade Tweet, Aggressively Rebounding Flash PMIs Puts Europe On Front Foot

Trump Trade Tweet, Aggressively Rebounding Flash PMIs Puts Europe On Front Foot

Spreadex  | Jun 23, 2020 09:06

After Monday’s uncertainties regarding a looming second wave of the coronavirus pandemic, the markets got some slightly less ambiguous news on Tuesday, covering both the relationship between the US and China, and the state of Europe’s recovery.

Shoring up investors’ confidence, Trump tweeted in the early hours of Tuesday morning that ‘the China Trade deal is fully intact’. And though what followed that declaration introduced an element of doubt, the President stating ‘hopefully they will continue to live up to the terms of the Agreement!’, overall it was enough to temporarily remove one worry from the troublesome macro buffet investors have been picking at for the last week or so.

Another injection of good vibes came from the Eurozone’s first few flash PMIs. Those coming out of France were especially strong, with both manufacturing and sectors returning to growth, easily outstripping analysts’ expectations in the process.

Germany’s numbers weren’t quite as robust, at 44.6 for manufacturing and 45.8 for services. Yet this still marked a significant improvement both month-on-month, and compared to what was forecast.

The Eurozone indices were rather overjoyed with all this. The CAC jumped 1.6%, eyeing 5000 as it did so, while the DAX surged just shy of 250 points, sending it back to 12500.

Pressure’s on, then, for the UK to do the same. The manufacturing PMI is expected to rise from 40.7 to 45.2, with its services counterpart looking to come in at 39.1 against May’s 29.0.

Awaiting those figures, the FTSE wasn’t quite as ebullient as its Eurozone peers. Nevertheless, a 0.7% increase pushed the UK index to 6290 – it’s worth noting, however, that it has lately struggled to make any significant forays above 6300.

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