China Manufacturing PMI at 50.2 in June from a previous of 50.4. The consensus was a drop to 49.9. This is positive given the number is above 50 which signals an expansion. However there is still uncertainty and no clear direction. If the number did come in below 50 then we could say that the Chinese economy is contracting and would therefore expect a recession within 12-18 months as this is a leading indicator (an indicator that changes before the economy as a whole changes) and powerful to the business cycle. Just waiting now to see the HSBC Manufacturing PMI number which had a previous value of 48.4. Also looking forward to the US ISM Manufacturing number which had a reading in May of 53.5. A number above this for June will be positive for the markets especially in the USA and could continue a risk on rally seen at the end of this week due to a positive outlook from the EU Summit which eased repayment rules for Spanish Banks, relaxed conditions for possible aid to Italy and unveiled a $149 billion growth plan for the regions economy. In addition this could be a technical short squeeze to flush out the weak players. Also looking ahead to Non-farm payrolls data due on 06/07/2012. This isn't a leading indicator but traders love moving the markets on this number. Lets see how this week plays out for the global markets.
