Weak data puts pressure on US to drive global recovery

Eurozone business growth was weaker than expected this month and factory activity in Asia’s top two economies remained stuck in low gear, putting the onus squarely on the US to drive a pick-up in global growth.

An absence of inflation pressures suggested Asian authorities could inject more stimulus if needed, while growth in the troubled currency union weakened just two months after the European Central Bank launched its €1-trillion stimulus programme. Meanwhile, the US Federal Reserve has all but put to bed speculation it would tighten policy in June as the world’s biggest economy barely grew at the start of the year. “The May (Purchasing Managers’ Index) surveys were broadly disappointing although nothing terribly bad,” said Richard Kelly, head of global strategy at TD Securities. “There is no question the ECB is going to continue with quantitative easing up until September 2016. China is just starting the amount of additional liquidity and stimulus that will be needed to safely rebalance the economy.”

Markit’s Composite Flash PMI for the eurozone, based on surveys of thousands of companies and seen as a good growth indicator, fell to 53.4 from 53.9.