- China slowing down
- Now US slaps tariffs on Mexico
It's the last day of May. For goodness sake it is June Tomorrow. In 22 days the nights will start drawing in. Forget Climate change there is temporal change going on. Who sped up time!!!
Chinese manufacturing officially contracted in May, with the purchasing managers' index slipping below the median 50 level. At 49.4, the index was well below the 49.9 to 50.1 the markets had been expecting. The battle of words with the US clearly isn't helping but the global slowdown is an equally troubling factor for Chinese manufacturers and the country's politicians.
And it isn't just China that is getting penalty-tariffed by the US, Washington has also whacked increased tariffs on goods arriving from Mexico. POTUS threatens to raise taxes further if the Mexican's don't get a grip on illegal immigration into the US. That saw the Mexican peso drop 2%. Sorry to be a naysayer but that policy seems slightly self-defeating. I would have thought, if you make it harder for Mexican's to make a living back home, won't they be even more tempted to sneak into America where the streets are paved with gold and everything comes with syrup? Just a thought. Meanwhile the US Dollar seems set to complete its fourth month of gains unless something untoward happens today.
Sterling is flat lining (not dead but not really moving) in a bit of a data-void this week. We did get some news overnight; The Nationwide reported that UK house prices grew at only 0.6% in the year to May. That slowdown is great if you are saving a deposit for your own home but enough to make you tut if you own one. Sterling looks set to end the month with a 'ho hum' as the B word continues to frustrate all concerned.
This afternoon brings personal consumption and expenditure data from the US which will most likely support the USD. Further north we get Canada's economic growth data and that is forecast to be rather upbeat. 0.4% growth on the month should be enough to boost the annual growth rate. If so, the Canadian Dollar will strengthen. Be ready for that and maybe protect yourself before 13.30 GMT if you need to buy CAD.
And a driver in Germany had his car photographed in a speed trap but got away with it because his face was obscured in the photo by a dove flying across the road. I know what you're thinking but training a bir5d to fly in front of your car to avoid being caught won't work in the UK. In Britain, this is perhaps the only law that forces you to incriminate yourself or someone else. You have no right to remain silent if you are flashed while speeding in the UK.