- PMI data published at the start of the week showed that UK flash composite PMI was lower for the third consecutive month, falling to 55.3, its lowest since February. IHS Markit’s Chief Business Economist, Chris Williamson, wrote that “..there are clear signs of the recovery losing momentum in the third quarter”.
- The Eurozone flash Composite PMI came in at 59.5, down slightly from a 15-year high of 60.2 in July.
- On Thursday, ECB Chief Economist Philip Lane said that the spread of the coronavirus Delta variant is likely to be limited across the region. He also said that the central bank would only decide when to unwind the current stimulus after their pandemic emergency program expires.
- Our Breadth indicator stayed positive but our Momentum Indicator ticked lower again.
- On Tuesday market sentiment got a boost after the US FDA granted full approval of the Pfizer/BioNTech vaccine for COVID-19 but the focus of the week was the Jackson Hole conference which began on Thursday.
- Concerns that the Fed would soon begin tapering prompted the sell-off in the previous week but those fears abated a little after data showed US private sector growth slowed in August to an 8-month low and concerns grew over the spread of the coronavirus Delta variant.
- In the event Fed chair Jerome Powell’s speech on Friday did not provide any evidence that the Fed will be imminently tightening its monetary policy.
- Our Breadth Indicator stayed negative and our Momentum Indicator ticked lower again.
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