The negative global economic impact of US President Donald Trumps trade war is starting to become evident as data published today showed a slowdown for Chinese manufacturers.
Chinas manufacturing purchasing managers index (PMI) data came in below expectations today, as did the first release for second-quarter Eurozone GDP.
Chinese stock markets initially dropped lower following the release but ended the day up, while the euro shrugged off the news strengthening almost 0.3 per cent versus the US dollar.
Read more: Trade war could 'derail the global economy'
The Chinese manufacturing PMI was reported today at a four-month low of 51.2 for July. This was lower than expected and down from 51.5 in June. A reading of 50 separates growth from contraction.
The indexs component on new export orders remained in contractionary territory, in a sign that the trade disputes are starting to have an impact. A weaker domestic economy and bad weather were also cited as factors behind the drop.
The US imposed $34bn (£25.8bn) of tariffs on imports from China earlier this month with a further $16bn to be imposed in the coming months. China retaliated by imposing an equivalent amount of tariffs on imports from the US.
Chinas services PMI dropped by a larger one point in July to 54.0, although continued to expand.
Read more: EU 'ready' to discuss reduction of 'all tariffs' with US
The Chinese data disappointment came before Eurozone GDP also came in below expectations. The EUs statistical office, Eurostat, reported a preliminary 0.3 per cent reading for the second quarter, the slowest in two years. This was below economist expectations that GDP growth would remain at the 0.4 per cent pace recorded in the first quarter.
No details were released on the composition of growth, but European Central Bank President Mario Draghi said last week that the threat of trade protectionism remained prominent.
Read more: Eurozone growth slows as inflation accelerates
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