Gold and silver are hovering around even but are looking marginally stronger to start the day on Wednesday. A few key PMI readings from China and the EU were due out today and what they had to say did not at all surprise the marketplace. US economic data for the week has thus far been fairly quiet and will more than likely remain that way throughout the duration of the week.
The situation in Ukraine has deescalated for now but is far from being completely out of the picture due to its volatile nature. The weekend yielded a supposed agreement between the United States and Russia which will see them work together to bring about a peaceful resolution to the crisis in Ukraine. As it stands there are still a number of armed militiamen that have seized buildings and towns across the eastern half of Ukraine and they are not going to simply lay down their arms. It will be interesting to see how the situation develops over the next few weeks and what it will mean for the future of the country and eastern Europe in general.
PMI Reports Bring Little Surprise
The first and most heavily anticipated PMI report due out today was China’s manufacturing PMI reading for April. Compared to a reading of 48.3 in March, April’s PMI yielded a slightly lower 48.0 reading. Any reading below 50 suggests contraction in that particular sector of the economy. Despite China’s PMI being lower than it should, their manufacturing output is still the envy of most of the world. Still, the fact that China’s economy has been inching along for the past few months is unnerving to countless investors.
The EU was greeted with a few upbeat PMI readings early on Wednesday, including a .3 improvement in the EU’s services PMI, moving from 52.2 in March to 52.5 in April. The EU;s manufacturing PMI reading saw a similar improvement with a reading of 53.3 in April versus 53.0 in March. The EU’s PMI reading only confirms what the market has been witnessing over the last few months, and that is a healthy, growing EU economy. While the situation in Ukraine has done little to help the progress of the EU’s economy, many are expecting to see similarly positive growth through the foreseeable future.