© Reuters.
AT Peter Nurse
Investing.com – Another session of declines is expected for , , e following Monday’s many PMI readings that highlighted a slowdown in European economic activity.
Add to that data on German factory orders released this morning which fell by 0.4% in April, an improvement on the previous month’s revised dramatic 10.9% plunge, but still indicative of the industrial sector’s woes. in the largest European economy.
The final composite PMI, considered a good indicator of overall economic health, released on Monday showed that business activity in the eurozone last month was buoyed by the currency bloc’s dominant services sector, offsetting the rising decline of the manufacturing sector.
Across the pond, US service sector activity barely grew in May, suggesting that recent strong growth in this important sector may now peter out amid rising interest rates and inflation.
Markets expect the Federal Reserve to suspend rate hikes next week, but the European Central Bank still appears to be a long way from following suit as inflation remains a major issue.
President Christine Lagarde on Monday boosted expectations of further rate hikes – the ECB is also meeting next week – saying it was too early to pin down a peak in core inflation, despite “signs of moderation”.
In the European night, Australia’s central bank raised interest rates by 25 basis points overnight, warning that inflation still remains too high in the country and that further policy tightening may be needed later in the year.
Among commodities, and WTI Crude Oil are giving up some of Monday’s gains, as traders returned their attention to the weakening US economic environment after the Saudi output cut.
Saudi Arabia, the world‘s top exporter, pledged over the weekend to further cut output by about one million barrels a day from July from May production levels in an effort to revive slump in oil prices. .
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