Eurozone PMI signals slowdown

Output contraction hitting a year-to-date high and declines seen across new orders, purchasing activity, and employment

By Farah Mourad | 1 July 2024

Market open
  • Gold prices struggled amid mixed signals on Monday

  • Silver prices rose despite uncertainties in Chinese demand

  • Le Pen's National Rally won 34% in the French elections

Over the weekend, the French parliamentary elections yielded significant results, with Le Pen's National Rally securing 34% of the vote according to exit polls, marking a notable political development.

EURUSD

The pair extended losses following the release of final PMI data from the Eurozone:

  • Eurozone HCOB Manufacturing PMI for June finalized at 45.8 (estimated 45.6, previous 45.6)
  • German HCOB Manufacturing PMI for June confirmed at 43.5 (estimated 43.4, previous 43.4)
  • French HCOB Manufacturing PMI for June revised to 45.4 (estimated 45.3, previous 45.3)
  • Italian HCOB Manufacturing PMI for June reported at 45.7 (estimated 44.3, previous 45.6)
  • Swiss PMI Manufacturing for June recorded at 43.9 (estimated 45.54, previous 46.4)
  • Spanish HCOB Manufacturing PMI for June dropped to 52.3 (estimated 52.9, previous 54.0)

The latest data indicated a deepening economic slowdown across the Eurozone manufacturing sector as output contraction hit a year-to-date high. Declines were observed in new orders, purchasing activities, and employment rates, although the outlook for output over the next twelve months remained cautiously optimistic.

Gold

Prices struggled to find clear direction during Monday trading, caught in a tight range amidst conflicting market signals. The increasing likelihood of a September rate cut by the Federal Reserve weighed on the US dollar, providing some support to gold. Geopolitical tensions and political uncertainty also provided a modest tailwind, although rising bond yields limited potential gains.

Silver

Prices continued their upward trend, bolstered by recent inflation concerns that could prompt Fed rate adjustments. However, uncertainties in Chinese demand, a key consumer of the metal, posed a potential ceiling on silver's gains.