PMIs and U.S. inventories: markets at record highs—what

PMIs and U.S. inventories: markets at record highs—what’s next?
On the eve of PMIs for the EU, UK, U.S. and Australia and the EIA print, here’s the macro state of play and market scenarios for today.

Global check on the eve of the PMIs (and the EIA)

After the first Fed cut and a wave of AI capex announcements (NVIDIA–OpenAI, Intel, Oracle), U.S. indices have strung together new all-time highs: the S&P 500 and Nasdaq closed last week at records, with momentum driven by technology and semiconductors. That’s the backdrop as today brings the flash PMIs for the euro area, UK, and U.S. (with Australia due later this evening), and then, in turn, Wednesday’s EIA U.S. crude inventories.

Where we are: latest readings (final August data)

• Euro area: Composite 51.0, services 50.5, manufacturing 50.7 (first manufacturing expansion since 2022). The picture is one of modest but improving growth.
• Germany: Composite 50.5 (revised), manufacturing 49.8, services 49.3 → recovery led by production, services back in slight contraction.
• France: Composite 49.8, manufacturing 50.4, services 49.8 → still below 50 but edging closer to growth.
• United Kingdom: Composite 53.5 (revised), services 54.2, manufacturing ~47 (ongoing contraction).
• United States (S&P Global): Composite 54.6, manufacturing 53.0, services 54.5 → broad expansion led by services.
• Australia: Composite 55.5, manufacturing 53.0, services 55.8 → faster growth than the G7. (Australia’s flash is out this evening at 23:00 UTC.)

U.S. crude inventories (latest)

For the week to 12 September, the EIA reported −9.285 mln bbl of crude (a large draw); gasoline −2.3 mln, distillates +4.0 mln. Next release Wednesday, 24 September 2025 (per the EIA calendar).

What to expect (September “flash” consensus)

EIA note: inventories don’t come out on Tuesday 9/23 but on Wednesday 9/24 (10:30 ET). The very large last draw will be the benchmark to see whether the build phase foreseen by the STEO (EIA) takes hold; if so, it would align with the downward pressure on Brent/WTI seen in recent sessions.

Macro → markets: how to read it

1) PMIs beat (pro-growth surprise)

• Rates & curves: slight rise in core EUR/USD yields on term premium; credit favored (IG > European HY).
• Equities: “risk-on” continues, with global cyclicals (industrials, semis, infrastructure software) outperforming; Europe benefits if Germany confirms stabilization.

2) PMIs miss (cooling)

• Rates: bull-steepening; faster repricing of BoE/Fed cuts.
• Equities: tactical rotation into defensives/quality-growth; tech holds up better if AI capex remains the bridge over the cycle.

3) EIA: another heavy draw

• Normally supportive for crude, but the expected oversupply (OPEC+/non-OPEC) and the global builds projected by the STEO could limit pass-through to prices. Focus on distillates (diesel) in the shoulder season.

Corporate moves “behind the tape”

• NVIDIA–OpenAI: strategic arrangement up to $100bn in compute/investment for ≥10 GW of Nvidia data centers—capex that still lubricates the AI cycle.
• Intel: agreement with the U.S. government (equity) backing a >$100bn plan to expand the supply chain: pro-capex signals for U.S. manufacturing.
• Oracle: multi-year plans $5bn UK and $2bn Germany for European cloud/AI infrastructure.
• Tesla: Q2 deliveries −13.5% y/y (384k), U.S. share down; auto margins still far from 2022 peaks—the EV sector has entered the cycle’s selective phase.
• Berkshire → BYD: full exit from the position (ending an investment begun in 2008). Beyond the tactical jolt, it signals the maturity/competitiveness of Chinese EVs.

Unifying take: AI capex remains a macro cushion supporting earnings and investment in leading countries (U.S., partly UK/Euro area), while EVs are going through a reality check on pricing and margins. If PMIs confirm moderate expansion, markets stay geared to soft-landing + AI-cycle, with volatility more tied to micro shocks (earnings/announcement risk) than to pure macro.

Handy recap list

• Euro area – Composite 51.0 | Services 50.5 | Manufacturing 50.7 | Flash consensus 51.1.
• Germany – Composite 50.5 | Services 49.3 | Manufacturing 49.8 | Flash consensus ~50.1.
• France – Composite 49.8 | Services 49.8 | Manufacturing 50.4.
• UK – Composite 53.5 | Services 54.2 | Manufacturing ~47 | Flash consensus comp. 52.9.
• U.S. – Composite 54.6 | Services 54.5 | Manufacturing 53.0 | Flash consensuses serv. 53.0 / man. 51.6.
• Australia – Composite 55.5 | Services 55.8 | Manufacturing 53.0 | (Flash tonight).

What to watch today practically

New orders and output prices in the PMIs (if they rise too much again, “services inflation” can weigh on central banks). 2) Manufacturing–services spread in Germany/France: if the spread closes because services weaken, the euro area loses traction. 3) EIA: confirmation/failure of the maxi-draw and its breakdown (Cushing, distillates). 4) Equity reaction: if the AI trade remains the engine, any “okay-but-not-too-hot” surprise is goldilocks for risk assets.