Canada has joined the rate-hike group. Bloomberg reports:
The Bank of Canada today became the first Group of Seven central bank to raise interest rates since July 2008 and signaled that further increases could be delayed by slower domestic and global growth.
Policy makers led by Governor Mark Carney increased the target rate on overnight loans between commercial banks to 0.5 percent from a record-low 0.25 percent. The last increase for the Group of Seven was by the European Central Bank, and Canada hasn’t raised rates since July 2007.
However, Australia, one of the early movers on rates, left them unchanged on Tuesday. From Bloomberg:
Australia’s central bank left its benchmark interest rate unchanged and signaled it may keep borrowing costs steady in coming months as it assesses the impact of the most aggressive rate increases in the Group of 20.
Governor Glenn Stevens and his policy-setting board kept the overnight cash rate target at 4.5 percent, the Reserve Bank of Australia said in a statement in Sydney today. The decision was predicted by all 22 economists surveyed by Bloomberg News.
Economic reports on Tuesday indicated that the global economy remains on a growth path.
Bloomberg reports another month of expansion for US manufacturing.
U.S. manufacturing grew in May at a faster pace than forecast as factories added workers to meet the greatest export demand in two decades as well as a revival in domestic orders.
The Institute for Supply Management’s gauge fell to 59.7 from 60.4 in April, exceeding the median forecast of economists surveyed by Bloomberg News, which called for a decline to 59. Readings greater than 50 point to expansion...
A report from the Commerce Department showed construction spending rose 2.7 percent in April, the most since August 2000, as demand related to the end of a tax credit spurred builders to break ground on more houses. Economists projected no change for April, according to the median forecast in a Bloomberg survey.
Reuters reports that manufacturing also continued expanding in the euro area, but at a much slower rate.
Manufacturing in the euro zone expanded in May, but at a far slower rate than April's 46-month high as cost pressures and tighter margins drove firms to take their feet off the production accelerator, a survey showed on Tuesday...
The Markit Eurozone Manufacturing Purchasing Managers' Index for May sank to 55.8 from 57.6 in April, nudged down from an earlier flash estimate of 55.9.
The UK's manufacturing PMI managed to hold steady at 58.0 in May, but ominously, Chinese manufacturing activity slowed, according to an AFP/CNA report.
China's manufacturing activity slowed in May, as the effects of government tightening measures to prevent the economy from overheating kicked in, official and independent surveys showed Tuesday.
The HSBC China Manufacturing PMI, or purchasing managers index, fell to 52.7 last month from a revised figure of 55.2 in April, an 11-month low, indicating the recovery of China's manufacturing sector lost some momentum, the bank said...
A separate survey released by a government agency on Tuesday showed manufacturing activity had dropped to 53.9 in May from 55.7 in April.
Real Time Economics has a list of manufacturing PMIs by country.
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