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Weak PMI Data Release Puts Pressure on Markets

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Construction PMI falls as business sentiment declines

The United Kingdom’s (EWU) construction PMI (purchasing manager’s index) fell in July to 45.9—slightly below 46 recorded last month. There was a fall in business sentiment following the Brexit vote—the United Kingdom’s decision to exit the European Union (EZU) (FEZ). It led to the fall in construction activity—PMI figures reached the lowest reading since June 2009. Also, a weaker value of the pound sterling versus the US dollar led to steep rises in material prices.

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Swiss PMI falls, retail sales contract

The manufacturing PMI for Switzerland (EWL) fell to 50.1 in July from 51.6 in the previous month. Production expanded at a sluggish pace and there was a decline in new orders, volume, and the number of employment opportunities created. On the other hand, retail sales in the Swiss economy contracted by 3.9% on an annual basis in June—compared to a 1.7% fall in the previous month. Prices of food, tobacco, and beverages along with non-food items also declined in June. On a monthly measure, Swiss retail sales fell by 0.5% in June.

Producer prices decline in the Eurozone

Producer prices in the Eurozone (IEV) fell by 3.1% on an annual basis in June—compared to a fall of 3.9% in May and expectations of a 3.5% decline. On a monthly basis, the producer price index rose 0.7% in June against 0.6% growth in May. The euro was trading on a higher note against the US dollar on Tuesday.

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