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MNI Global Morning Briefing

MNI (London)

Monday throws up a full schedule of data releases. The highlights in Europe include the publication of the final manufacturing PMIs for Spain (0815GMT), Italy (0845GMT), France (0850GMT), Germany (0855GMT), the EZ (0900GMT) and the UK (0930GMT). In the US the ISM manufacturing PMI at 1500GMT will be closely watched.

Manufacturing PMIs remain in expansion territory

According to the flash estimates, the manufacturing PMIs for France, Germany, the EZ and the UK all registered above the 50-mark in January and markets look for the final prints to register in line with the flash estimates.

The French PMI rose to a six-month high of 51.5, although the report paints a mixed picture. While output and employment eased slightly, new orders ticked up. Nevertheless, business sentiment increased in January. The German manufacturing PMI fell to a four-month low but remains comfortably above the 50-mark at 57.0. The German report noted severe delivery delays of inputs to manufacturers which led to a rise in input prices. Meanwhile, the EZ's index edged lower to 54.7 in January, marking a two-month low. Output growth weakened to the slowest since the beginning of the recovery and the report noted that the deterioration was broad based across countries. The UK's PMI slipped to a seven-month low of 52.9 in January according to the flash result, following December's reading of 57.5. UK firms noted a rise in output, although the growth rate eased. Moreover, supplier delivery times were the highest since start of the survey 30 years ago.

The Spanish manufacturing PMI is forecast to ease to 50.9 in January after rising to 51.0 in December. Similarly, the Italian manufacturing PMI is seen slightly lower at 52.4 in January, down from 52.8 recorded in the previous month. Tight restrictions due to still high infection rates also weigh on the manufacturing sector, leading to a deceleration of activity growth.

ISM manufacturing PMI seen lower

The ISM manufacturing PMI is forecast to drop to 59.5 in January after improving to 60.5 (revised) in December. December's increase was broad-based with every major category recording a monthly gain. Similar survey evidence provides a mixed picture. The Chicago Business Barometer increased in January as did the Philadelphia Fed manufacturing index, while the Dallas Fed business activity index and the Richmond manufacturing index ticked down.

The events to follow on Monday include speeches by Atlanta Fed's Raphael Bostic, Boston Fed's Eric Rosengren and San Francisco Fed's Mary Daly.

MNI London Bureau | +44 203-865-3814 | irene.prihoda@marketnews.com
MNI London Bureau | +44 203-865-3814 | irene.prihoda@marketnews.com