Global PMI's have improved so far
(Kitco News) - Global manufacturing PMI's this morning and overnight have beenoverwhelmingly positive. As the world moved out of the COVID-19 pandemic itseems that the manufacturing sector is recovering. This does lead to the theoryof transitory inflation being feasible. There could be a big-time lag for thiscoming to fruition but if the developing nations improve at the same rate asthe results below output could start to improve and pressure could ease.
In the U.K. the recovery regained momentum in October, but supplyshortages hit manufacturing growth, and cost inflation reaches a new recordhigh. One interesting highlight from the report said "Goods producerswidely commented on difficulties meeting customer demand due to capacityconstraints resulting from lengthy supplier lead times and shortages of staff.Around 64% of UK manufacturers reported worsening supplier delivery times inOctober, while only 1% saw an improvement."
In Europe, it was much of the same. The sector seems to be movingin the right direction but the supply issues are a big problem.ChrisWilliamson, Chief Business Economist at IHS Markit said"Supplyissues continue to wreak havoc across large swathes of European manufacturing,with delays and shortages being reported at rates not witnessed in almost aquarter of a century and showing no signs of any imminent improvement,"
Risk sentiment has been pretty good today and the improvement inPMI's have helped matters. The DAX is 0.60% higher and the FTSE 100 is 0.31%higher. This does come off the back of a very mixed session in Asia wherereally only the Nikkei 225 (0.34%) moved higher. Gold has been very tied to therisk of late. This is because of the U.S. dollars role in the current riskenvironment. When risk appetite improves the U.S. dollar seems to be pullingback and gold rises. Some might say this is not usual as if risk sentimentimproves gold should move in the opposite direction.
Australian Manufacturing PMI57.3vsPrev56.8
Japanese Manufacturing PMI (Oct)53.0 vs Prev 51.5
German Manufacturing PMI (Oct)58.2vs Exp56.5Prev 58.4
EZ Manufacturing PMI (Oct)58.5 vs Exp 57.0 Prev 58.6
U.K. Manufacturing PMI (Oct) 57.7 vsExp 56.0 Prev 54.9By Rajan DhallFor Kitco News
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rdhall@kitco.comwww.kitco.com