Closing post
Time to wrap up, after growing signs that the UK, eurozone and US economies are slowing….
Copper and yields seem to be trying to say something pic.twitter.com/OFv5hKxUy2
— Tom Hearden (@followtheh) June 23, 2022
….and as rising inflation pushed up Britain’s debt repayment costs.
With railway workers continuing to strike, and British Airways’ Heathrow staff voting to walk out, a summer of industrial action looks increasingly likely.
And as Germany takes a step closer to rationing gas after a drastic drop in supplies from Russia, energy disruption this winter looms....
Updated
US private sector growth hits five-month low
The US economy slowed sharply in June as companies were hit by a drop in demand, according to the latest healthcheck on American firms.
Growth across the US private sector slowed to its lowest level since January, when the Omicron variant caused a massive surge in Covid-19 infections.
S&P Global Flash US Composite PMI, which measures activity in the sector, hit a five-month low this month, while manufacturing output is now shrinking.
Companies also reported a drop in new business, for the first time in almost two years, which underlines that demand is easing.
The report says:
Although service providers continued to indicate a rise in output, it was the weakest increase for five months.
Manufacturers fared worse, with factory production slipping into decline as the respective seasonally adjusted index fell to a degree only exceeded twice in the 15-year history of the survey, at the height of the initial pandemic lockdowns in 2020 and the height of the global financial crisis in 2008.
Weaker demand conditions, often linked to the rising cost of living and falling confidence, led to the first contraction in new orders since July 2020.
🇺🇸 Latest flash #PMI data indicated a slowdown in US growth in June (51.2, May: 53.6), with the manufacturing sector signalling its first contraction in two years. Read more: https://t.co/ELJVdPgDrg pic.twitter.com/ze6yc7zPcE
— S&P Global PMI™ (@SPGlobalPMI) June 23, 2022
But athough inflationary pressures “remained marked in June”, the pace of input price inflation eased to the slowest for five months.
Traders are calculating that this means US interest rate may not rise as fast as thought -- if the economy is at greater risk of dropping into recession....
Implied US interest rates plunge after weak US PMI report.
— Jamie McGeever (@ReutersJamie) June 23, 2022
Terminal rate down to 3.38% in Q1 next year - it was over 4% last week - and Dec 2023 implied rate falls below 3%. pic.twitter.com/aHWIO7vROW
