Markets digested the news that US President Biden and House Speaker McCarthy once again held talks. Comments from Biden and McCarthy at the meeting’s conclusions were optimistic, saying progress was made and default is ‘off the table’ but there was very little of substance and no sign of agreement.
Staff level talks recommenced a little after the leaders’ meeting concluded. McCarthy held a news conference after saying “he feels discussions were productive” and “tone of discussion was improved from previous times.” Staff level talks will continue.
We also had the Judo Bank Australia Manufacturing PMI came at 48 in May 2023 unchanged from the previous month, preliminary readings showed.
It pointed to the third consecutive month of deterioration in business conditions in the manufacturing sector led by a persistent reduction in new orders and outputs.
Meantime, input prices remained well below that seen in 2022. Despite the reduction in output levels, firms continued to hire but at a slower pace. Business confidence in the manufacturing sector improved although the level of confidence remained below the long-run average due to market uncertainty.
The Japan Manufacturing PMI increased to an eight-month high of 50.8 in May 2023 from a final 49.5 in the previous month, flash data showed.
It was the first expansion in the factory activity since last October, as the post-COVID recovery gained traction, with both new orders and output returning to expansion territory for the first time since last June, and the fastest pace in 13 months. Meanwhile, suppliers’ delivery times shortened for the first time since January 2020, albeit only fractionally.
Employment growth eased, with backlogs of work increasing at a slower pace. On the pricing front, input cost inflation slowed to the softest since February 2021, while output cost inflation eased to a four-month low.
Finally, business sentiment remained positive, despite easing from April, amid a broad improvement from reduced COVID-related disruptions and growing bets that inflationary pressures would peak soon and ease throughout the remainder of the year.