June 24, 2022

Daily Report 24/06/2022

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The UK PMI business confidence data recorded a decline in the manufacturing index to a 16-month low of 53.4 for June from 54.6 the previous month and in line with consensus forecasts. The services-sector reading was unchanged at 53.4 and slightly above market expectations of 53.0. There was a slowdown in overall new orders growth to the weakest level for two years while business optimism dipped to a 25-month low. Inflation pressures eased slightly on the month, but the rate of increase in costs was still close to record highs with selling prices also continuing to rise sharply on the month. The CBI retail sales index declined to -5 for June from -1 previously and slightly below consensus forecasts of -2 with confidence remaining weak. The UK data maintained fears over the outlook, but with some relief that further deterioration was avoided and Sterling was resilient, especially as the Euro-Zone data was worse.

Key Data 

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13:45 BoE’s Haskel speech

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The German and French PMI data releases for June were all below levels for May and also weaker than consensus forecasts.  The Euro-Zone manufacturing index dipped to a 22-month low of 52.0 from 54.6 and below consensus forecasts of 53.9 while the services-sector index declined to a 5-month low of 52.8 from 56.1 and well below expectations of 55.5. Overall business expectations also declined to the lowest level since October 2020 as new-orders growth stagnated. There was a slight easing of inflation pressures, although cost and price increases remained very high in a historical context. The Euro dipped sharply amid fresh fears surrounding the Euro-Zone economic outlook. There were also further concerns over gas supplies with the German economy minister stating that rationing cannot be ruled out.
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The US PMI manufacturing index dipped to a 23-month low of 52.4 for June from 57.0 previously and below expectations of 56.0 while the services-sector index also fell to a 5-month low of 51.6 from 53.4 and below consensus forecasts of 53.5. New orders declined for the first time since July 2020 with export orders also contracting and overall business optimism declined sharply. Employment growth slowed and, although inflation pressures remained strong, the increase in prices slowed to the lowest rate since March 2021.

Key Data

14:00 Michigan Consumer Sentiment Index (Jun)              Forecast 50.2    Previous 50.2
14:00 New Home Sales (MoM) (May)                                 Forecast 0.588M   Previous 0.591M