The third quarter of 2016 could begin with an uncertainty before the traders take a break for the 4th of July weekend.
However, before the long holiday weekend, the global financial markets would receive a significant quantity of manufacturing data from across the globe (Europe, the US, China, and India).
Other than the Markit PMI data, the US data also contains the key ISM manufacturing index pertaining to June. It is projected to increase moderately from 51.3 in May 2016 to 51.4 in June 2016.
The other data in the US pertains to construction expenditure and vehicle sales every month. They are estimated to be more than 17 million on an annualized basis.
The stock market witnessed an upward movement to close out the previous quarter with a gain. This was possible mainly due to the rally in the last week of June, which assisted in removing most of the losses post-Brexit.
The new quarter could probably attract more money. The global PMI data could be extremely critical from a long-term perspective. It could most probably be indicating a stabilization in the manufacturing sector.
However, it would also be considered being not very informative because it is old data and before-Brexit.
Analysts have indicated that any data that will have the possibility to display the impact of Brexit would be more crucial, but that data would not be available until later in the year.
Economists estimate Brexit to check growth in Europe and may send the UK into a recession. The US is expected to witness modest paring of growth.
At present, the manufacturing data could help in understanding if the inventory correction in the first half of 2016 is coming to an end. There are unsettled signals that manufacturing is starting to pick up.
The markets have calmed since Brexit is not going to be implemented in the short-term. The stock market would react to the elections in the US. The third quarter also consists of August and September (two months that are not strong). The manufacturing data have always influenced market sentiment. Traders always analyse the global manufacturing data before making investment decisions. The forecast for trade is positive in the near future.