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The main data events Thursday include the final manufacturing PMIs for Spain (0815BST), Italy (0845BST), France (0850BST), Germany (0855BST), the EZ (0900BST) and the UK (0930BST). In the US, the releases of the ISM manufacturing PMI will be closely watched at 1500BST.
Europe's manufacturing PMIs changed only marginally in June
While the French flash manufacturing PMI ticked down to a four-month low of 58.6 in June, the German index edged up to a two-month high of 64.9. The EZ flash manufacturing PMI remained unchanged at May's level of 63.1 in June. Markets expect the final prints to register in line with the flash results. The EZ report noted that business activity grew at the fastest rate in 15 years, driven by the reopening effect. Input prices rose further in June at an unprecedented rate as demand outstripped supply. Additionally, delivery times lengthened again, backlogs rose and inventories declined.
Source: IHS Markit
The Italian and Spanish manufacturing PMIs, for which no flash results are available, are forecast to change only marginally. The Spanish index is forecast to rise 0.2pt to 59.6, while the Italian index is seen 0.1pt higher at 62.4
The final UK manufacturing PMI is also forecast to register in line with the flash result showing a small dip to a two-month low of 64.2, which is still the second highest reading on record. The loosening of restrictions continued to provide a boost to output and new orders. Nevertheless, supply chain issues persisted in the UK as well. The report noted longer delivery times and higher input costs due the lack of raw materials.
ISM manufacturing PMI forecast to ease
Manufacturing activity held steady in June and the Institute for Supply Management's manufacturing index should tick down to 61 from 61.2 in May. Analysts say the ongoing semiconductor shortage could have restrained some production through the month, but firms are still seeing high demand even as spending shifts toward services.
Similar survey evidence is in line with market forecasts. The Chicago Business Barometer dropped to a four-month low in June, while Dallas Fed manufacturing PMI fell almost 4 points.
The main speakers to follow on Thursday include ECB's Christine Lagarde, Andrea Enria and Frank Elderson as well as BOE's Andrew Bailey.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.