This article is originally referred from iForex News
Asian stock markets are mostly down, as risk aversion continues to dominate markets. Bund and Gilt futures declined in tandem with European stock markets and after yesterday’s dip there is some room for stabilization, though, especially in the Eurozone where the composite PMI brought a slight upward revision and the final services PMI reading, after robust national data.
Eurozone final services and composite PMIs revised higher. The services reading was revised up to 52.9 from 52.8 reported initially and versus 52.5 in June. The improvement over the month was driven by Germany and France and could suggest that companies are seeing the chance of picking up some of the business currently located in the U.K. The Spanish services reading meanwhile fell back as services will be concerned not just about the impact on tourism from the U.K., but also the implications for the large British Expat community in Spain.
Overall the Eurozone number still managed to improve and helped to compensate for the dip in manufacturing confidence, which left the composite nudging higher to 53.2 in July from 53.1 in June. So a confirmation of an overall positive survey for July, with no sign that the Brexit referendum has dented confidence significantly, which leaves the ECB in wait and see mode.
NIESR Warns of UK Contraction in Q3
NIESR warned of a contraction in the UK economy in Q3 and a strong chance that the economy will fall back in Q4. The market anticipates a rate cut when the Bank of England meets to determine monetary policy on Thursday. The market may be disappointed if the BOE only cuts rates, and does not add to its bond purchase program.
U.S. MBA mortgage market index sank 3.5% in data released earlier, along with a 2.4% drop in the purchase index and a 4.2% slide in the refinancing index for the week ended July 29. The average 30-year fixed fell 2 basis points to 3.67%, about a half percent below levels earlier in the year and still near historic lows as month-end inflows, the steady FOMC and weak Q2 GDP all conspired to knock rates lower.
Original Source: iForex News