The USA and Europe continue to benefit from the easing of Covid measures in terms of economic performance. The information we get from the current data is that the service activity catches up with the manufacturing industry activity as the openings take place. In other words; demand shifts from goods to services. In terms of the area it covers in the economy, this effect is significant. While slowing infection rates gradually contributed to the revival in services, especially in bars and restaurants, after months of quarantine; intense demand also brings with it supply and labor shortages.
According to the June PMI data announced today; While the manufacturing PMI in Germany accelerated to 64.9, the service sector saw a growth that gained momentum with an index value of 58.1 and made up for the gap with manufacturing. In the details of the data; There is a decline in the number of manufacturers reporting longer delivery times, with shipping times an important detail as it underpins supply shortages with rising material prices. The fact that production can keep up with the demand is critical for the industry to maintain its momentum. Whereas; inventories are declining, price pressures for goods and services remain high; This indicates that the upward trend in inflation will continue. In France, on the other hand, while the service sector increased to 57.4, manufacturing also decreased its momentum with an index value of 58.6. While an index value of 63.1 is recorded in the manufacturing data of the Euro Zone, there is an acceleration to 58 in the services sector.
It seems that the economic growth in the Euro Zone will continue to be realized at a high speed for the period after 2Q21. On inflation; There is an ECB trying to follow a course on a similar plan to the Fed. Lagarde, like Powell, earlier this week, reiterated her view that price pressures will be temporary. Whereas; There is also a section within the ECB that warns of an inflationary rigidity that will continue for a certain period of time and for an uncertain duration. This leads to a lack of full consensus on the PEPP side on whether to cut back in September or any other timeframe. High demand balance in tight supply conditions continues to be the main theme of inflation, and even if the speculative effects are cleared, conditions regarding supply and delivery conditions point price pressures to levels above the target inflation.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
