• 20 hours Trump Was Right About The Dollar
  • 23 hours Is Silver Gearing Up For A Rally?
  • 1 day World’s Largest Hedge Fund Turns Bullish On Gold
  • 1 day It’s Time To Spend More On Clean Energy R&D
  • 2 days Contrarian Investors Are Beating The Stock Market
  • 2 days Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 2 days Amazon Faces European Union Anti-Trust Probe
  • 2 days Commodities Are Having A Stellar Year
  • 3 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 3 days 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 3 days Tesla, Apple Claim China Is Stealing Intellectual Property
  • 3 days EV Giants Duke It Out For Battery Dominance
  • 4 days Tech Billionaire Takes Aim At Google
  • 4 days Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 4 days Expect A Pullback Before Gold's Next Major Rally
  • 4 days Why Interest On Gold Matters
  • 5 days Ten Extravagant Food Items For The Wealthy Only
  • 5 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 6 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 6 days Is A Gold Selloff Looming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

European Manufacturers On A Tear On Weaker Euro

At the start of the second quarter, the eurozone’s manufacturing sector grew at its fastest pace in six years, climbing from 56.2 in March to 56.7 in April and marking the eighth straight month of expansion. Of the eight eurozone countries that IHS Markit surveys, only Greece failed to show any improvement during the month.

Growth was spurred by new orders, output and job creation, and companies are benefiting from both the historically weak euro and the European Central Bank’s ongoing stimulus, including low interest rates. Factory jobs are currently seeing one of their strongest upticks in the survey’s 20-year history.

Ahead of France’s presidential election this past weekend—polls heavily favored the victor, 39-year-old Emmanuel Macron, over far-right candidate Marine Le Pen—the country showed impressive momentum, rising from 53.3 in March to 55.1 in April. New orders grew at their sharpest pace in six years. Meanwhile, the United Kingdom’s manufacturing sector continued to expand post-Brexit, rising to a three-year high of 57.3.

(Click to enlarge)

Both the U.S. and China continued to expand at the start of the second quarter, though at a slightly slower pace than in March. U.S. manufacturing growth relaxed a little more than 2 percent, from 57.2 to 54.8, but it still remains at a high level in the six months following the presidential election. Chinese factories pumped the brakes in April, with growth slowing to a seven-month low.

Manufacturing on a global level continued to expand as well but, like the U.S. and China, at a slower pace. The index fell from 53 in March to 52.8 in April, with the one-month reading falling below its three-month moving average for the first time since April of last year.

(Click to enlarge)

Like clockwork, copper and oil were off last week. As I’ve shown a number of times before, the PMI can be used as a forecast tool for commodities and natural resource prices.

Last Wednesday copper lost 3.5 percent, marking the largest single-day loss since September 2015. The red metal ended the week at $2.53 a pound. Oil tumbled nearly 5 percent on Thursday to close the trading day at $45.48, a level we haven’t seen since December. On Friday it finished above $46 a barrel.

By Frank Holmes via USfunds.com

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

Back to homepage

Leave a comment

Leave a comment