Chart of the Day

In China, the official manufacturing PMI fell to 50.9 in May, while the services PMI decreased to 53.5. Those falls suggest economic growth in the world’s second-largest economy is slowing, which could have important implications for financial markets in the second half of the year, especially for commodity prices where we have seen some pockets of weakness lately.

Macro

The slowdown in growth is partly because the PBOC has been tightening credit - both the 6- and 12-month credit impulses are negative.

There’s plenty of scope for the PBOC to cut rates if it wanted to, but it seems to be concerned about the financial risks.

The eurozone ESI rose in June and looks consistent with the strongest growth in some time.

The US Conference Board measure of consumer confidence rose in June. Consumers' assessment of the present situation is improving noticeably - it will be interesting to see if that is reflected in a stronger payroll gain in Friday’s data.

In the UK, the flow of household consumer has turned positive again, and the flow of mortgage credit remains very strong.

US house price inflation accelerated to 14.6% in April, the highest this century.

Markets

Growth stocks have been leading the way again.

The SKEW implies traders are still concerned about the risk of a major market correction.

Brazil’s currency has bucked the trend against the USD in the past week, managing to rise against the USD whereas most other currencies have depreciated following the Fed’s hawkish tilt a couple of weeks ago.

Like what you see? Please forward this email to your friends and colleagues, or use the button below to share it on social media. They can also follow us https://twitter.com/macro_daily

Got a question? You can reply directly to this email to get in contact.