Asia's major manufacturing economies saw their fastest expansion in factory activity in years last month, driven by robust demand for electronics, while November was also the best month for euro zone factories in over 17 years. As David Pollard reports, it could firm the case for central banks to tighten monetary policy next year.
November saw a glittering performance from global production lines. Major economies enjoying their biggest rise in factory activity in years. 17, in fact, for the euro zone. And even Brexit-anxious Britain had its best manufacturing month since 2013. (SOUNDBITE) (English) LCG SENIOR ANALYST, JASPER LAWLER, SAYING: "Europe is going great guns ... and actually today's data suggests that actually this weaker pound and a generally an economy that's generally holding up seems to be actually starting to support the manufacturing sector." China cast a slight cloud over the new data. Its manufacturing PMI dipped as pollution controls cool output. Elsewhere, the strong numbers bring the debate over monetary tightening back to simmering point. On Thursday, the Bank of Korea became the first major central bank in Asia to raise rates in three years. The euro zone's new numbers show factories there raising their prices at the fastest in six years. (SOUNDBITE) (English) LCG SENIOR ANALYST, JASPER LAWLER, SAYING: "Both the U.K. and the eurozone deserve tighter policy next year. Probably Japan does as well. China seems to already be heading in that direction." At 60.1, the euro zone PMI reading is a full ten points above the level that denotes growth. New orders are soaring ... At a time when the overall inflation rate still lags official targets .... (SOUNDBITE) (English) LCG SENIOR ANALYST, JASPER LAWLER, SAYING: "That for investors for the most part is actually a good thing, because it's you getting the growth which generally feeds through to earnings. In the case of the stock market you don't have that runaway inflation which incentivises central banks to to suddenly start rapidly tightening policy." If on this occasion, Europe's share traders were looking elsewhere ... A stronger euro and disappointment over a delay in the US tax reform bill pushing markets into the red .... With the Dax close to hitting its lowest level in nearly 9 weeks.