European markets saw an upward trend in early trading, led by the Spanish Ibex, which benefitted from a notable rebound in the manufacturing PMI. The Caixin manufacturing PMI from China also indicated expansion, boosting sentiment regarding China’s economic recovery. Attention is now turning to the US, with the ISM manufacturing PMI expected this afternoon. A return towards the 50 threshold is anticipated, signaling potential growth in the coming months. The focus will also be on the prices paid component, with expectations of a 0.9 decline fostering optimism about decreasing manufacturing inflation.
In other developments, optimism surrounding a potential ceasefire in Gaza, led by President Biden, initially drove oil prices lower. Improved relations across the Middle East are seen as a positive development. However, this initial decrease in crude oil prices did not last, influenced by an OPEC meeting over the weekend. Saudi Arabia pushed for an extension of the significant oil production cuts, maintaining elevated crude prices. Despite this, the meeting offered some optimism, with the agreement allowing OPEC+ members to increase oil sales starting in October and continuing to grow in 2025, contingent on market conditions. This development aims to stabilize energy prices without driving them significantly higher.
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