The PMI surveys take top billing today. China’s report showed a further slowdown in manufacturing activity with the index following to an 11-month low and well into contractionary territory.
Flash readings for the euro zone, Germany and France are due later. Whisper it, but it could just be that Europe’s economy is past the worst.
Beijing’s travails will obviously have knock-on effects for Europe, particularly Germany for which China is such a huge market. A Chinese “hard landing” – still not the central scenario – would be the last thing the world economy needs just as it shows signs of life.
Having said that, both the German government and Bundesbank have been talking up second quarter growth while admitting it will moderate somewhat in the third.
One of the European economic themes of the year so far has been the fear that France will fall so far behind Germany that the twin motor of EU policy will break, but here too there have been tentative green shoots.
French industry morale hit a year high yesterday and consumer spending has perked up a little. However, June unemployment numbers due later in the day are likely to show the jobless rate at or near a record level.