It’s a short trading week with the Canada Day holiday here and Independence Day in the U.S., so there’ll be no surprise if the markets are a little aimless. There’s no Canadian data until Friday.
The latest read on factory prices in the Eurozone has heightened the calls for some stimulus from the European Central Bank. Prices at the factory gate slipped 0.5% in May. The International Monetary Fund is the latest to call for a cut to interest rates. The ECB’s benchmark rate is already at 1%.
In the U.S., May factory orders were up an unexpected 0.7%. The broadly based gains came in well above the 0.2% expectation. However, American manufacturing has been spotty with declines in 3 of the past 5 months.
May construction spending in the U.S. jumped 0.9% driven by new home building. It’s the second straight monthly gain. While the construction indiustry is showing flashes of growth other sectors are stumbling. The June ISM Manufacturing Index dropped to 49.7% from 53.5%, the first contraction in about three years. Nine of the 18 industries surveyed registered pull backs, seven posted gains.
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