In the US, the 'flash' PMI points to a slight deceleration in the pact of manufacturing activity expansion, as the headline dropped to 53.4 from a final 54.0 reading in May. That said, manufacturing new orders actually improved by 0.2 points (to 54.5) and inventories declined, so the gap between new orders and inventories rose, suggesting further expansion is in the pipeline.
In the euro area, the composite 'flash' PMIs came in stronger than expected on solid service sector output, while manufacturing also improved but less so, as better output supported both sectors (albeit new orders were slightly weaker). The euro area headline manufacturing PMI increased to 52.5 from 52.2 (final reading in May), on broad-based improvement in the German manufacturing sector, and finally recovering French manufacturing. Manufacturing new orders less inventories improved even more significantly, as destocking in the euro area most likely continues.
In China, the June 'flash' manufacturing PMI improved to 49.6, a three-month high, on strong new orders and output while employment continued slipping. In Japan, June 'flash' manufacturing PMI declined to 50.0 from 50.9 in May, in line with the message from the Reuters Tankan and likely reflecting the subdued exports. New orders were also weaker, falling below the 50 benchmark for expansion, along with an increase in inventories that suggests lower sales compared with last month.
"Our preliminary estimate of the Barclays global manufacturing confidence suggests that the broad-based improvement that started last month likely continued in June, albeit moderately; our global index points to an increase to -0.42 from -0.43 in May (final reading), driven by the improving sentiment in China and the euro area. When looking at the estimate for the new orders less inventories series, the improvement looks more promising; global new orders rose in all countries but Japan, and destocking was quite significant as well, such that the normalized gap series rose tentatively to -0.34 from previously -0.48." estimates Barclays
