The global flash manufacturing PMI was basically unchanged in April as improvement in Europe and Japan offset further slowing in the US PMI. Europe increased +0.6pts to a very strong 56.8, Japan was up +0.5 to 52.8, while USA was down -0.5 to 52.8 - the same level as Japan! There's now a notable divergence between the US 10-year government bond yield and the DM composite manufacturing PMI. Typically the two trade more or less in line, and for good reason (it reflects broader trends in the global economy, commodity prices, inflation, activity, and confidence). So the question is: "who's wrong?"
The global flash manufacturing PMI ticked sideways in April and there is now a material divergence between the developed markets composite manufacturing PMI and the US 10-Year bond yield.
The pure synchronized upturn has given way to a more messy synchronized upturn as Europe soars, Japan meanders, and America rolls over. The drop in the US PMI is a real risk and warrants close monitoring.
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