International Economic Market
China was red-hot again this week. Momentum post the interest-rate cuts is good, and after what has been a 12 month hiatus in property prices, activity in that industry seems to be on the up.
The preliminary China Purchasing Manager Index for May was released and frankly continues to idle. I’m not sure that is going to change much anytime soon, as the global economy seems fine, but probably still only flying on one engine.
In the US, the economic data continues to meander. Consumer confidence released on Friday night last week had quite a fall, and the Federal Reserve alluded to the patch of current softness in the minutes from their recent meeting that were released this week. All the same, conditions in the US, I think, on a 12mth+ time horizon continue to look stronger than most anticipate. Housing in particular remains a strong point.
In Europe, the economy continues to repair away from the spotlight of Greek discussions. The ECB earlier in the week declared they would front-load a lot of the planned ‘bond-buying’ across European bond markets pre-summer. This is helpful initially, although I have to say I’m not sure the real value in doing that particularly since the Greek outcome is still up in the ether.
It is seen that the next Greek payment to the IMF due on June 5th is the next flash-point in the crisis, since it has been suggested Greece lack the wherewithal to make the payment. We’ll see I guess, but that’s only a fortnight away.