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Global PMI Day, and Potential Market Reaction

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Usually, the first couple of days of the month have extra volatility as the major economies report PMI data. However, this month seems to have coincided that virtually all of the market movers will be reporting on the same day.

The market is still digesting the potential implications of the latest covid variant and the continuing increase in cases in certain parts of Europe. And so we could see some extra weight added to the data.

PMI’s could broadly stay above the level of 50, to maintain expansion momentum through the coming months. Usually, there is a sales slump after Christmas, and managers might already be pricing that into their outlook.

Overall, better than expected PMIs might help shore up risk appetite. But if we get some key misses, the markets might take another leg lower.

What to look out for


First to report is China’s Caixin Manufacturing PMI. We already got the official figure this morning, which covers a smaller number of bigger companies.

The general expectation for China’s private measure for industrial activity is to remain broadly unchanged at 50.5 compared to 50.6 prior. That’s just barely in expansion territory, but it’s still optimistic considering all the concerns around the housing industry.


Next, we have Markit Manufacturing PMI for Spain. Analysts project the data to show a minor increase to 57.9 from 57.4 prior.

Spain’s covid situation is much better than that of other large countries in the eurozone. Spain also has more room to grow, which could imply that the IBEX will finally start catching up to the DAX.


Switzerland also reports their Manufacturing PMI just 15 minutes later. And we can expect to see a notable drop in the data. The consensus is for it to come in at 64.4, a whole point lower than the 65.4 in October.

Analysts are pointing to a deterioration in global markets, in particular of the kinds of luxury goods that Switzerland is famous for. The high price of the Franc is one of the culprits and it could renew pressure on the SNB to do something about that.

More data from Europe

Italy, France, and Germany report their November PMI next. Despite being larger countries, they are likely to have less of an impact, because we already got their preliminary results two weeks ago.

The market will likely only care if there is a significant (as in, more than 0.5 points) difference between the flash figure and the final figure.

Similarly, the eurozone data is likely to follow the pattern of the major economies. This means that unless there is a significant deviation from expectations, the market will probably take the data in stride.

Economists anticipate that the eurozone November Manufacturing PMI will come in at 58.6. In fact, that is a marginal improvement from the 58.3 registered in the prior month.

UK and US releases

The UK is up next, and the forecast is a November Manufacturing PMI of 58.2. Most notably, that is an improvement over the 57.8 figure in October. The improving outlook relating to retail sales in the lead-up to the holidays is one of the factors bolstering manufacturing production.

Finally, the US could also show a modest improvement in its November Manufacturing PMI, which is forecast at 59.1, compared to 58.4 reported previously.

The prior number came in the middle of earnings season before the major retailers had reported. However, it appears that the good news continued throughout the rest of the season, as manufacturing continues to have a more positive outlook.

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