The amount of worry concerning global economic growth appears to be increasing at the start of the week. The drop in China’s PMI on Saturday shows further trade-war induced weakness impacting the world’s number two economy. China’s factory activity contracted for the fourth straight month as both new orders and employment numbers fell.
On Monday, Germany reported its manufacturing sector remains in contraction mode with Manufacturing PMI coming in at 43.5, as too was the case with the Euro Area and the UK, which reported Manufacturing PMI of 47 and 47.4, respectively. Of those reporting on the day, only France was able to overcome consensus, by reporting Manufacturing PMI of 51.1.
Crude oil continues to slide, the WTI lost half a percent by 3 pm UK time, marking further anticipation of weakness after the Trump administration slapped 15% tariffs on more than $100bn worth of imports on Sunday. China retaliated with tariffs on some $75bn worth of U.S. products.
Markets are hoping positive progress could be made when the U.S. and China meet later in the month to resolve their trade dispute which so far has been hammering sentiment and causing turbulence in equity markets. Trade actions on China have so far backfired on the Trump administration, according to observers.