1) China kicked off the data parade last night, with official manufacturing coming in a shade above consensus – and showing expansion to boot – at 50.1. In contrast, the Caixin manufacturing print for China was both below consensus, and showing contraction at 49.2. Across to Europe, and the Eurozone print was in line with consensus at 51.5; a stronger showing from France (allez! allez!) offset disappointing prints from Germany, Italy and Spain.
2) Across to the Americas, and the official U.S. manufacturing PMI came in better than expected – rebounding on last month to 51.3. Meanwhile, Brazilian GDP gave some much-needed reason for optimism, as Q1 ‘only’ contracted by -0.3% on the prior quarter, down -5.4% year-on-year (versus -5.9% expected).
3) The chart below from the Wall Street Journal highlights how a weakening ruble over the last two years has helped to ease the pain of a falling oil price in Russia. The currency has somewhat acted like a hedge, weakening in tandem with oil prices to buoy oil export revenues. While oil prices are still some 50% lower than in mid-2014, they are only than 10% lower when priced in Rubles:
4) Europe is losing its reputation of being the renewable energy leader as it dials back its investing, while Asia ramps it up. As we have highlighted previously, a record $328.9 billion was invested in solar, wind and other renewables last year – although European spending dropped to $48.8 billion from $62 billion in the year prior, with German financing dropping by 46%.
Concurrently, Chinese renewable investment rose above $100 billion last year, while spending in the rest of the Asia & Pacific region surpassed Europe.
5) Finally, ahead tomorrow’s OPEC meeting, here is the year-on-year increase in crude loadings over the last year for OPEC members (including Indonesia). With material increases in crude oil exports over the last year from the likes of Iran, Iraq, and Saudi Arabia, every single of the last twelve months has seen increased loadings on year-ago levels.
OPEC loadings are up over 7% through the first five months of this year compared to 2015, averaging 1.65 million barrels per day higher. Wow.