Markets still very quiet

The markets are still very quiet as the summer holiday season is still underway. Yesterday the main focus was PMIs in Europe. The data came in relatively positive as the euro area composite PMI edged up to 53.3 against an expectation of 53.1, the highest reading since January. There was good news coming out of France while Germany was a bit softer. This data bodes well for Europe as it shows resilience post Brexit and growth is expected to come in at 0.3% – 0.4% quarter on quarter.
 
Manufacturing exports at highest level in two years
 
In the UK, the latest CBI orders data weakened but managed to come in a little better than the -10 expected by the market. Manufacturing exports are at their highest level in two years as the pound slumped post referendum, providing a welcome boost to the sector. The overall health of the manufacturing sector is in good shape as a poll of manufacturers showed that one-fifth of businesses said their export orders were running at above normal levels. Over in the US, economic data was mixed with manufacturing data disappointing as PMI in August dropped to 52.1 against an expected 52.6. The Richmond Fed manufacturing survey also weakened to -11 against an expected +6.
 
German economy slows in second quarter
 
This morning we have already received data out of Germany which showed the economy slowed in the second quarter, when GDP increased by 0.4% compared to 0.7% in the first quarter. The annual growth rate for the second quarter was confirmed at 3.1%. In the UK, British Bankers Association will publish mortgage figures for July which will provide some clues on the state of the UK housing market in the immediate aftermath of the Brexit vote. This afternoon will be quiet in the US with only June FHFA house price index reading and July existing home sales data.