Eurozone’s manufacturing output contracted for the first time since the early days of the pandemic
US stocks declined on the final day of the second quarter as fresh data showed that household spending growth slowed in May amid the continued price increases. The core personal consumption expenditures price index rose 4.7% in May, staying around more than 40-year highs. Meanwhile, Fed’s Mester said that she supports a 75 basis point hike at the central bank’s July meeting if current economic conditions persist. The Dow Jones Industrial Average shed 0.8%, the S&P 500 slid 0.9%, and the Nasdaq Composite fell 1.3%.
Asian equity markets made a mostly bearish start to the third quarter on Friday, with the MSCI’s broadest index of Asia-Pacific shares outside Japan finishing unchanged in relatively calm trading thinned by a holiday in Hong Kong. Nikkei 225 in Tokyo fell 1.73%, China’s Shanghai Composite gave up 0.32%, and South Korean Kospi lost 1.17%. Adding to a downbeat tone among investors, the Bank of Japan’s Tankan survey showed that the headline index for large manufacturers declined to 9 from 14 in the previous quarter.
European stocks opened lower ahead of the weekend, with semiconductor shares leading the losses following a downbeat outlook from Micron Technology. The pan-European STOXX 600 index was down 0.8% in early deals. On the data front, Eurozone’s June final manufacturing PMI arrived at 52.1 versus the preliminary estimate of 52.0. As such, the manufacturing output contracted for the first time since the early days of the pandemic.
In the currency markets, the USD index has steadied around the 105.00 figure after yesterday’s drop from local highs above 105.50. EURUSD briefly plunged below 1.0400 before bouncing back towards 1.0500 eventually. However, the shared currency failed to preserve gains in volatile trading to come back under pressure on Friday. In the short term, the path of least resistance remains to the downside, with market focus shifting gradually towards the US ISM Manufacturing PMI report due later in the day.