French and German Manufacturing Contracts

The Rugby World Cup kicked off with most games going with the form book, but Japan made an impressive start in front of home support. It’s Wales’ turn today to make a start for the home nations. They ought to be successful, but coming through injury-free will be crucial for the men in red.  

German Manufacturing figures do not bode well for key European data

Both French and German manufacturing sectors shrank again in September. The German Purchasing Managers Index (PMI) delivered a 41.4 reading; down from 43.5 last month and well below the optimistic looking forecast of 44. We will get the German Ifo business sentiment index tomorrow and I would be very surprised if that too were not a poor figure. The European Central Bank (ECB) and the EU’s negotiators need to be cognisant of the plight of both France’s and Germany’s manufacturing base as the global economy slows. 

US economic updates in the news

The other big ticket news items this week include US consumer confidence indices and the US economic growth data. It is expected that consumer confidence will have slipped a little and growth may have slowed to as low as 2.0%. If so, that is in stark contrast to Q1’s 3.1% growth and will turn the volume up on calls for the Federal Reserve to be more aggressive with their rate cuts. I know Tweets don’t have a volume, but Trump’s might.

Could there be a rate cut in NZ?

We will also see an interest rate decision from the Reserve Bank of New Zealand (RBNZ). No change is forecast, but there is an outside chance of a small rate cut after a bout of poor data from New Zealand.

By way of contrast, Norway’s central bank raised their base rate last week for the fourth time in the year to try to calm a market buoyed by the rise in the value of Norway’s oil exports.

The youth of today

And I saw a message online from a disgruntled person querying the masses of children taking a day off to promote action on climate change. He (or she) stated that these children could set an example by walking instead of being driven everywhere, by getting off their mobiles, their tablets and their games consoles and letting their batteries die for a day or two. By keeping clothes for more than a ‘season’, by getting out into nature rather than sitting in watching inane ‘reality’ shows. By turning off the air-con in cars, by not expecting to fly to the sun for their holidays. By reading books rather that downloading it a tablet and recharging it. By shunning fast food etc. etc. etc. I know it’s a grouchy view, but it made me chuckle.