Today’s Trading Playbook
KEY THEMES
After three months of above 50 PMI readings, December’s came at 48.2 as growth in both output and new orders declined at a moderate pace. Meanwhile, the long-lasting effect of the COVID-19 crisis on labor market dynamics is still material given the continued fall in the employment index. We expect PMI readings in 2021 to remain in contraction territory through the first quarter of the year, with outlook improving afterwards. For more details, please read our PMI macro note published on 5 January 2021.
On a different note, Ministry of Petroleum approved to reschedule debts that resulted from natural gas consumption related to ceramics manufacturers. While this should provide some breather to ceramics manufacturers, weakness in demand coupled with current natural gas prices will remain the two biggest challengers to factories profitability.