China’s manufacturing sector remained under pressure through June, falling into contraction territory for the third month in a row. This downturn comes as the nation grapples with deflation concerns, raising questions about the sustainability of its economic recovery amid global uncertainties.
China recently announced that it has clarified the final details of its trade agreement with the United States. This is a major advance for international trade. While the official purchasing managers’ index (PMI) for China showed slight improvement from May’s figures, it remained below the critical 50-point mark, indicating ongoing struggles within the manufacturing sector.
In North America, Canadian officials decided to walk back on their proposed digital services tax, affecting the landscape of international trade. It will be interesting to see if this action indeed indicates a policy response to US pressure, as both countries continue to tread uncertain economic waters. U.S. President Donald Trump participated in a White House COVID-19 press conference today. As to the recently announced 90-day pause in trade tariffs, he brazenly stated that his administration “can do whatever we want.”
In the trade war arena, the S&P 500 had a record day on Friday. It had gained up to 0.76% at one point during the session and finally closed above its prior peak. U.S. markets added to that positive momentum right as European trading sessions were coming to an end. This proclaims a truly synchronized response throughout the world’s markets. U.S. markets were closed halfway through trading on Thursday in observance of Independence Day. They took Friday off as well for the holiday.
The upcoming release of June’s nonfarm payrolls report on Thursday will be crucial for determining whether the rally in U.S. markets continues. Investors are closely monitoring economic indicators as they seek to gauge the resilience of the labor market and its impact on consumer confidence.
On Monday, all but one of the indices in the Asia-Pacific markets closed higher. Coupled with the continued decline of Chinese manufacturing, this surge provides a rare ray of hope. The situation remains fluid, with global investors keenly observing economic indicators and international trade negotiations that could shape market trajectories.