Global Economy Briefing: February 3, 2026 Morning

Key Points

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• U.S. manufacturing roared back: ISM jumped to 52.6 with new orders surging to 57.1, signaling a sharp rebound in factory activity.

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• European manufacturing PMIs improved across the board, led by France back in expansion and Germany narrowing its contraction.

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• RBA cut rates 25bp to 3.85% as expected, but Australian building approvals collapsed; Korea’s inflation cooled to 2.0%.

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United States

\nThe ISM manufacturing report was the standout. The headline PMI jumped to 52.6 from 47.9, well above the 48.5 consensus—a decisive move back into expansion.
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\nNew orders surged to 57.1 from 47.4, the sharpest single-month gain in recent memory. Employment improved to 48.1 from 44.8, still contracting but at a slower pace.
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\nPrices paid edged up to 59.0, in line with expectations. The S&P Global Manufacturing PMI confirmed the tone at 52.4 vs 51.9 expected. Atlanta Fed GDPNow held steady at 4.2% for Q4.
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\nShort-term funding was stable (3-month 3.600%, 6-month 3.525%). Fed’s Bostic spoke; the Loan Officer Survey was released. Net: factory momentum is accelerating hard, but price pressures remain elevated—the Fed will watch this carefully.
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Europe and UK

\nManufacturing PMIs improved nearly everywhere. Eurozone headline rose to 49.5 from 48.8, beating the 49.4 consensus. France was the bright spot, printing 51.2 (vs 51.0 expected), firmly in expansion.
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\nGermany improved to 49.1 from 47.0, better than the 48.7 consensus but still contracting. Italy edged up to 48.1 (vs 48.5 expected), and Spain slipped to 49.2 from 49.6.
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\nGerman retail sales surprised to the upside: +0.1% m/m (vs −0.1% expected) and +1.5% y/y after a −1.6% prior—a notable turnaround.
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\nEuropean car registrations flipped positive at +1.1% y/y (vs −2.2% prior); Italy’s registrations jumped 6.2% y/y.
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\nUK manufacturing PMI beat at 51.8 (vs 51.6), and Nationwide house prices rose 1.0% y/y (vs 0.7% expected), rebounding 0.3% m/m after a −0.4% prior.
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\nSwiss retail sales beat at 2.9% y/y, and procure.ch PMI improved to 48.8 from 45.8. French short-term yields eased slightly (3M 2.007%, 6M 2.036%, 12M 2.058%).
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\nNet: Europe’s factory sector is healing, consumer data is stabilizing, and the UK housing market is showing resilience.
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Canada

\nManufacturing PMI flipped back into expansion at 50.4, up from 48.6—a welcome reversal after months of contraction.
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Asia-Pacific

\nThe RBA cut rates 25bp to 3.85%, as universally expected. Australian building approvals collapsed −14.9% m/m (vs −6.2% expected) after a 13.1% surge prior; y/y growth cratered to 0.4% from 19.4%.
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\nPrivate house approvals slowed to 0.4% m/m. Commodity prices swung sharply positive at +2.6% y/y (vs −3.2% prior). Korea’s inflation cooled to 2.0% y/y from 2.3%, in line with expectations, supporting the disinflation narrative.
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\nJapan’s monetary base contracted −9.5% y/y, slightly better than the −10.3% consensus, reflecting ongoing balance sheet normalization.
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\nThe 10-year JGB auction printed 2.249%, up from 2.095%, signaling continued yield pressure. India’s manufacturing PMI slipped to 55.4 from 55.0 expected at 56.8—still firmly expansionary.
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\nSingapore business expectations improved to 11.0 from 8.0, and manufacturing PMI ticked up to 50.5. New Zealand building consents fell −4.6% m/m after +2.7%.
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\nNet: Asia is mixed—Australia’s rate cut was dovish but construction is weakening sharply; Korea’s inflation progress supports regional easing; Japan yields continue to climb.
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Latin America and Africa

\nMexico was closed for Constitution Day. Brazil’s manufacturing PMI weakened further to 47.0 from 47.6, extending the contraction—industrial stress continues.
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\nSouth Africa’s manufacturing PMI jumped to 48.7 from 40.5, a significant improvement though still below 50.
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\nVehicle sales rose to 50.07K (+7.5% y/y) but slowed from the 19.2% prior pace. Net: Brazil’s factory sector remains under pressure; South Africa is recovering from a low base.
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What It Means

\nThis was a “U.S. manufacturing revival, global disinflation intact” session. The ISM surge—especially the new orders jump to 57.1—is a material shift in the U.S. growth picture and complicates near-term Fed easing expectations.
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\nEurope’s PMI improvement and German retail rebound support the soft-landing thesis there. The RBA delivered its expected cut, but Australian housing approvals warn of construction headwinds ahead.
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\nKorea’s cooling CPI and Japan’s gradual balance sheet normalization keep Asian disinflation on track. Brazil remains the weak link in EM.
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\nTilt: Respect the U.S. manufacturing reacceleration—this favors cyclicals over defensives near-term; stay constructive on Europe where data is improving broadly; in Asia-Pacific, the RBA cut opens room for risk but watch Australian housing closely; underweight Brazil until PMI stabilizes.

This is part of The Rio Times’ daily global economic intelligence for the Latin American financial community.

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