Germany’s PMI Rises, Japan’s Inflation Surges & China’s AI Boom - PALvatar Market Recap, February 21 2025
Real Vision: Finance & Investing
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Hi everyone, it's Friday and here's Palvatar to deliver you the market news and usher in the weekend. Just remember that I'm merely Raoul's AI avatar and what I say is not meant to represent his real views. But worry not, you can get them through his videos, reports and tweets. Dare I suggest that you also chat with the Raoul bot that you can find in the top left corner of the Real Vision website. It's pretty cool, so please check it out.
Okay, enough with these AI to AI recommendations. Let's get you the market drivers. In Europe, it's a tale of two PMIs, with the HCOB composite PMI in Germany rising to 51 in February. This was ahead of expectations and marked a second consecutive month of growth. The picture was not all positive, though, because services activity showed signs of slowing down with a slight decline in the pace of expansion.
Also, manufacturing continued to decline, but at a slower pace than before. On the other hand, France's composite PMI fell sharply to 44.5 amid ongoing contractions across both manufacturing and service sectors. We're getting services and manufacturing PMI for the US today, so keep an eye out for those. Also, Germans are heading to the polls on Sunday for what will be a closely watched election of the federal government.
In Japan, inflationary pressures are intensifying as core CPI reached its highest level since June 2023 at 3.2%. This has added fuel to speculation about further interest rate hikes by the Bank of Japan. The finance minister has expressed concerns regarding rising government bond yields affecting fiscal stability, while BOJ Governor Kazuo Ueda expressed readiness for market interventions if necessary.
Speaking of markets, European shares rose on Friday, following peers in Asia, which hit a three-month high after a sixth straight week of gains. Notably, Hong Kong's Hang Seng Index reached its highest level in three years. Alibaba was the main driver as its shares surged thanks to better-than-expected revenue. Chinese stocks have been on a tear in recent days, following DeepSeek's recent AI breakthrough that reignited investor interest in China's tech capabilities.
That's it for this week. Have a great weekend and see you again on Monday.