Global equity and fixed-income markets are entering a period of heightened volatility as traders brace for a dense schedule of US economic data and the European Central Bank’s latest policy decision.
The third full week of July brings critical signals on how the global economy has transitioned into the second half of the year, with preliminary Purchasing Managers’ Index (PMI) readings for July taking center stage alongside the conclusion of June’s data series.
The ECB’s policy move will be scrutinized for any shift in tone regarding future rate adjustments, particularly as private sector activity in the euro zone contracted for a third straight month in June, although the pace of decline moderated compared to previous readings.
This divergence between monetary policy expectations and underlying economic weakness adds complexity to the trading environment.
Meanwhile, emerging market data offers a contrasting narrative.
South Africa’s private sector activity expanded for the first time in months, with the S&P Global PMI rising to 50.5 in June from 49.6 in May, crossing the critical 50.0 threshold that separates growth from contraction.