(Kitco News) – There has been a spate of positive PMI readings leading into the US session this afternoon. Overnight the China Caixin Manufacturing Purchasing Managers Index for the month of October showed that the index is still in expansionary territory. The data came in at 53.6 beating the average analyst consensus of 53.0 and the previous of 53.0. Adding to this news both the UK and German manufacturing PMI figures also beat estimates. The German figure recorded record growth in new orders in October. Manufacturing is very important in Germany as it accounts for about a fifth of the economy and this latest reading is the highest reading since February 2018.
Phil Smith, principle economist at IHS Markit sounded an alarm and stated:
“Less positively and perhaps a sign that growth could be about to slow as more firms get back to pre-COVID levels of output, we saw the first setback to manufacturing expectations for seven months in October,” said Smith. It comes amid rising numbers of coronavirus cases in Europe and the increased threat of renewed disruption to supply and demand that comes with it,”.
EUR/USD is trading just above flat on Monday after coming under some serious pressure in recent sessions. The price is now battling with the 1.1650 level but the main bulk of pressure in the EU area has been in GBP/USD as more lockdowns are being enacted in England for 1 month (possibly more).
The DAX is fairing much better off the back of the improved risk appetite and trades 1.15% in the black. S&P 500 futures are also looking positive trading higher by around 1.39% pointing to a decent cash market open at the start to the week.
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