International News 03 August 2026
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European Manufacturing Seen Improving as Spain's PMI Returns to Expansion
Europe's manufacturing sector is expected to remain resilient in July, with analysts forecasting an improvement in manufacturing activity across several countries ahead of the release of Purchasing Managers' Index (PMI) data on Monday. In Spain, consensus estimates point to a return to expansion, with the manufacturing PMI projected to rise to 50.5 in July from 49.7 in June, moving back above the 50-point threshold that separates expansion from contraction. Spain's manufacturing sector slipped into contraction in June after new orders fell sharply, leading manufacturers to cut production for the first time in three months. The June reading was also weaker than both economists' expectations and May's 51.2 level. According to S&P Global Market Intelligence, the downturn was primarily driven by softer demand, but the anticipated rebound in July suggests manufacturing conditions may be stabilizing as new orders begin to recover.
Houthi Attacks Expand Iran Conflict Despite Pause in U.S. Airstrikes
The Iran conflict widened over the weekend despite a pause in U.S. airstrikes, as the Iran-backed Houthi movement launched attacks on Saudi oil facilities along the Red Sea coast and accused Ukraine of targeting one of its vessels in the Caspian Sea. The U.S. military said on Saturday that its naval blockade of Iran "remains fully in effect," but did not explain why it had halted its escalating air campaign after 13 consecutive nights of strikes. No new Iranian attacks on neighboring countries were reported over the weekend, marking a break from Tehran's previous pattern of daily retaliation against U.S. operations. A senior official in President Donald Trump's administration said the pause reflected Washington's preference for diplomacy, while emphasizing that the United States had already demonstrated the consequences Iran would face if it failed to engage seriously in negotiations.
PBOC Pledges Timely Policy Support, Expands Panda Bond Market to Bolster Economy
China's central bank, the People's Bank of China (PBOC), said it will adjust its monetary policy tools in a timely manner and facilitate the issuance of panda bonds to support the country's slowing economy. In a statement released on Sunday following a policy meeting chaired by PBOC Governor Pan Gongsheng, the central bank reaffirmed its commitment to maintaining an "appropriately loose" monetary policy stance and ensuring ample liquidity throughout the second half of 2026. The PBOC also pledged to further open China's financial sector by expanding access to domestic financial markets, strengthening cooperation between domestic and international financial infrastructure, and broadening the range of liquidity management and risk-hedging instruments. In addition, the central bank said it would continue supporting efforts to resolve debt risks associated with local government financing vehicles (LGFVs) while encouraging these entities to adopt more market-oriented business models.