China and US report better data but UK hit by weak economy and Libor scandal

In contrast to Monday, Tuesday's economic data were mostly positive.

In China, the non-manufacturing PMI from the National Bureau of Statistics and China Federation of Logistics and Purchasing rose to 56.7 in June from 55.2 in May.

In the US, factory orders rebounded 0.7 percent in May after having fallen 0.7 percent the previous month. Excluding transportation equipment, factory orders increased 0.4 percent in May after falling 0.9 percent the previous month. Auto sales rose to an annual rate of 14.1 million in June from 13.7 million in May.

Economic data from the UK on Tuesday were not as positive though. While consumer lending picked up in May, mortgage approvals fell and construction activity declined in June, with the Markit/CIPS Construction PMI falling to 48.2, its lowest reading since December 2009, from 54.4 in May.

Further souring the mood in the UK is the ongoing scandal over Libor manipulation, which has now led to the resignation of Barclays' chief executive amid claims of possible complicity by the Bank of England as well as others. Reuters reports:

Bob Diamond squares up to critical British MPs on Wednesday, a day after quitting as Barclays' chief executive over the Libor interest rate scandal, potentially dragging the Bank of England, government and rival banks deeper into the affair.

Diamond's testimony to a parliamentary inquiry could prove politically explosive; on Tuesday, Barclays published a 2008 internal memo from him which fellow managers understood to mean that the Bank and government might approve if they manipulated the Libor rate at the height of the banking crisis.