Positive Eurozone indicators
The Eurozone flash PMI (purchasing managers’ index) released by Markit on June 23 gives an encouraging outlook for the Eurozone. Please note that Europe (EFA) (EZU) is among the major copper consumers in the world.
PMI hits a 14-month high
The chart above shows the Eurozone’s manufacturing PMI. In June, the flash PMI came in at 52.5, up from 52.2 in May. This is the highest PMI reading in 14 months.
The composite PMI, which covers both services and manufacturing sectors, came in at 54.1, a 49-month high. Based on its survey, Markit expects Eurozone GDP (gross domestic product) to rise by 0.4% in 2Q. The region witnessed growth of 0.4% in 1Q as well.
Positive for copper companies
The PMI survey points to resilience in European manufacturing activity. New manufacturing orders have now increased for seven consecutive months, and employment has increased for eight months. An increase in the Eurozone’s PMI is a positive sign for the global copper industry.
Given the positive Eurozone data, copper prices rose by as much as 1%. Earlier, prices had fallen to a three-month low on concerns over the ongoing Greece crisis.
While the Eurozone PMI came in better than market expectations, China’s PMI sent mixed signals. And because China is the biggest copper consumer, it’s important that copper investors keep a close watch on Chinese data. In the next part of this series, we’ll discuss the Chinese copper industry in greater detail.