PMI Indices and U.S. Trade Balance

PMI Indices and U.S. Trade Balance
Fragile growth and global tensions: between expanding services and record deficits, the balance remains precarious

Eurozone
• The S&P Global Composite PMI rose to 50.9 from 50.6 in June, indicating modest growth driven by the services sector (51.0 vs. 50.5 in June), especially in Italy and Spain.

United States
• The Composite PMI climbed to 55.1 in July, a sharp increase from 52.9 in June, thanks to strong momentum in the services sector (55.7 vs. 52.9 in June).

In summary: robust services in the U.S. support overall expansion; the Eurozone shows moderate growth, still below historical averages.

U.S. Trade Balance – May 2025

The trade deficit (goods + services) reached $60.2 billion in June, down 16% from May, reflecting a slight drop in exports (–0.5%) compared to a sharp contraction in imports (–3.7%).

Are the effects of tariffs starting to show?
The deficit is beginning to decline significantly, thanks to stable domestic demand and tariff policies that have reduced foreign purchases.

Global Economic Outlook — August 5, 2025

• Eurozone: Modest growth with a composite PMI of 50.9. Structural weaknesses persist with stagnant demand, but business confidence remains stable.

• USA: Overall strong expansion (composite PMI 55.1), despite a still-muted manufacturing sector.

• U.S. trade deficit sharply declining, signaling the first tangible effects of tariffs on imports.

• Aggressive U.S. trade policy: New tariffs up to 41% on several partners — including India, Canada, Taiwan, and others — are increasing global uncertainty.

Impact on Commodities and Markets

• Gold: May remain elevated as a safe-haven asset, especially if further tariff tensions emerge.

• Oil: Supported by service-sector demand, but vulnerable to slowdowns in manufacturing growth.

• Industrial metals: Uncertain demand; a stagnant manufacturing sector weighs negatively on future prospects.

Summary

• The global economy appears moderately expansionary, driven by U.S. and EU service sectors, but with clear weaknesses in manufacturing and a growing U.S. trade deficit.

• U.S. protectionist policies are the main source of uncertainty, with potential wide-ranging impacts on global confidence, trade flows, and inflation.

• Closely monitoring upcoming manufacturing PMIs, new tariff developments, and commodity market movements will be crucial to assess the outlook for the second half of 2025.