Massive amounts of monetary stimulus from Chinese and European central banks has done little to spur factory growth, adding to calls for more easing. As Sonia Legg reports it has also raised questions about whether the Federal Reserve can raise U.S. interest rates this year.
When you consider the amount of stimulus central banks have pumped into the global economy recently you'd think factories would be running at full speed. But latest surveys from China and Europe suggest otherwise. October was another subdued month. Even price slashing failed to drum up trade in the euro zone, putting more pressure on the ECB. Mike Ingram is from BGC Partners (SOUNDBITE) (English) MARKET STRATEGIST AT BGC PARTNERS, MIKE INGRAM, SAYING: "The ECB is probably right to be cautious about growth prospect for the euro zone both for 2015 and 2016 - all eyes on what they come up with in their December forecast." It's more than half a year since the ECB started pumping 60 billion euros a month of new money into the region's economy. But inflation still remains way below the bank's 2 percent target. (SOUNDBITE) (English) MARKET STRATEGIST AT BGC PARTNERS, MIKE INGRAM, SAYING: "Momentum peaked probably in the first quarter and that being the case we will need to see some monetary accommodation. In fact more of that is currently what the market is banking on and if Mario Draghi and co don't deliver in December I think we may have problems." Markit's final euro zone manufacturing index was slightly up from September France's recovery struggled, Spain's growth was the slowest since 2013 and even Germany's was only modest. Italy though bucked the trend with activity increasing for the ninth straight month. There was promising news from Britain and Japan. The Markit/Nikkei PMI hit its highest in a year and UK factory activity was at a 16-month high. But overall, markets weren't impressed. Stocks fell in Europe and Asia.