While market apprehension about some form of US military action in Syria over the weekend proved to be unfounded the decision by President Obama to merely delay it, subject to a vote in Congress, is likely to provide some temporary respite today as we head into a new month and a new week, with a particular focus on economic data from the manufacturing sector across the world. We started over the weekend with the latest Chinese manufacturing PMI numbers hitting a sixteen month high at 51, suggesting that the recent turnaround in the Chinese economy is starting to gain traction. While some have expressed scepticism about the accuracy of the official numbers the latest HSBC manufacturing PMI numbers also came in above 50 as the recent measures to cut taxes for smaller businesses pointed to an improvement here as well. It is the European economy however that could do with the boost that an improving manufacturing sector could bring with the final manufacturing PMI numbers for August from Spain, France, Italy, German, Greece and the wider euro area. With the exception of France and Greece, expectations are for readings above 50, with Spain expected to come in at 50.5, Italy 50.8, Germany 52 and the euro area at 51.3. France is expected to come in at 49.7, just marginally in contraction, while Greece continues to struggle. While it remains obvious that the smaller economies in Europe continue to struggle the fact that the larger economies are starting to recover may well provide some optimism and contribute to a trickle-down effect in the coming months if the current recovery in business activity is able to be sustained, and is not simply a case of inventory rebuild. While the recent recovery in some of the economic data in Europe is welcome, sentiment continues to remain cautious with one eye on the approaching German election and last night’s live TV debate between German Chancellor Angela Merkel and her closest challenger Peer Steinbruck didn’t alter the electoral dynamics that much with neither candidate really landing a verbal blow on each other. In the UK expectations about the economic recovery in Q3 continue to build, especially after the upward revisions to Q2 GDP a couple of weeks ago, and the improving data that we’ve seen from various industry bodies, like the CBI over the past week or so. The August manufacturing PMI numbers are once again expected to show a continued improvement from July’s 54.6, with expectations of a small improvement to 55. In company news Vodafone shares are once again set for the spotlight after weekend news that the board has agreed a deal to sell its stake in Verizon Wireless for around $130bn with confirmation set for later today. In earnings news housebuilder Berkeley Homes will be hoping to follow in the footsteps of its sector peers and post some positive numbers for the first half of this year. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


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