Marketmind: Testing the 'Goldilocks' view of the global economy
Reuters
Published Aug 01, 2023 12:51AM ET
A look at the day ahead in European and global markets from Kevin Buckland.
The 'Goldilocks' view that equity investors are taking of the global economy continued into August, as a benchmark of Asian stocks hovered around Monday's 16-month highs.
Signs of a peak for European consumer inflation to start the week echoed the narrative in the U.S., where optimism for a soft landing continues to grow.
Of course a lot can still go wrong, in this week alone. The United States has a string of key jobs reports, culminating with monthly payrolls on Friday. And the Bank of England decision on Thursday could mar the peak rates story for the world's major central banks.
Australia's central bank on Tuesday held interest rates at 4.1% for a second month saying past increases were working to cool demand, but warned some more tightening might be needed to curb inflation.
Optimism that Beijing will prop up the necessary parts of the economy to ensure it reaches its 5% growth goal has already come off the boil, with Chinese markets the weakest in the region amid profit-taking from Monday's rally.
A private sector purchasing manager survey released on Tuesday showed a surprise contraction in Chinese manufacturing, in yet another sign of the post-pandemic recovery's struggles.
The PMI parade continues through the day, with numbers from the euro zone and many of its members, including Germany, as well as from the UK and the U.S.
Whether the overall positive run of corporate earnings continues rests on the shoulders of companies including BP (LON:BP) and Diageo (LON:DGE) in Europe on Tuesday, before we get results from a bellwether of the world economy, construction equipment maker Caterpillar (NYSE:CAT), ahead of Wall Street's opening bell.
Key developments that could influence markets on Tuesday:
Manufacturing PMIs from Sweden, Spain, Italy, France, Germany, the euro zone, UK and U.S.
UK house prices
Jobless rate from Germany, Italy
U.S. ISM, JOLTS, 1-month TB auction
Get The News You Want
European earnings including BP, Diageo, Uniper (ETR:UN01), Daimler Truck (ETR:DTGGe), Deutsche Post (ETR:DHLn).
U.S. earnings including Caterpillar, Uber (NYSE:UBER), Pfizer (NYSE:PFE) and Merck (NYSE:MRK) before the bell, with Starbucks (NASDAQ:SBUX) and AMD (NASDAQ:AMD) after the close.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.