Election Day in America | Euro PMI Data Falls on Trade Uncertainties
Published November 6, 2018
The 2018 US midterm elections officially opened this morning. Projections are indicating that Democrats will regain majority of the House with 23 seats required to make the shift. Additionally, it is expected that the Senate will be retained by the Republicans. The gridlock in Congress will be viewed as a positive for markets and would be preferential to any major upsets.
Significant euro PMI data was published this morning, with the index for the euro area falling to 53.1. Business expectations also were affected with readings representing the weakest levels since 2014. The composite index for Italy dropped to 49.3, while German data displayed unpredicted growth in factory orders. Major slowdowns in the area are a direct result of global trade uncertainties weighing on sentiment.
The probability of the UK exiting from the EU has taken another step in the wrong direction for Prime Minister May. The UK has drastically increased efforts to procure a Brexit deal within a month, despite issues that remain with the Northern Ireland border. At this critical point in negotiations, the UK can choose to stay in the customs union for an extended period or permit Northern Ireland to have a separate arrangement with the EU.
The Chinese Vice President Qishan offered comments in Singapore that the Chinese central government has remained open to deliberations regarding its trade war with the US. Wang went on to caution that China would not be “bullied and oppressed by imperialist powers.”