Developed Markets Lead Global Growth as July PMI Hits 53.3 and China Cools to 50.8
Updated
Updated · LPL Financial · Aug 17
Developed Markets Lead Global Growth as July PMI Hits 53.3 and China Cools to 50.8
2 articles · Updated · LPL Financial · Aug 17
Summary
Global growth leadership has shifted back to developed economies, with developed-market composite PMI rising to 53.3 in July from 50.5 in March while the global reading improved to 52.6.
The U.S. drove much of that rebound—its PMI jumped to 54.5 from 50.3—and the eurozone returned to expansion at 52.0, with Germany posting its first expansionary reading in months.
Emerging markets lost momentum over the same period: China slowed to 50.8 from 55.4 in February, Brazil fell back below 50.0, and Russia stayed in contraction, though India remained relatively strong at 54.3.
LPL said softer U.S. July payroll growth of 30,000 and easing inflation have shifted markets from expecting more Fed hikes to anticipating a pause at 3.50%–3.75%, helping lift the S&P 500 to new highs.
The report said narrowing global rate gaps could reduce currency-driven volatility and refocus investors on fundamentals, while keeping foreign demand for Treasuries—led by Japan's $1.1 trillion holdings—critical to U.S. borrowing costs.