China is not the only place where industrial activity is slowing down. Look to Europe for the flip side of the China PMI story.
European manufacturers were riding high just a few months ago as German companies in particular exported plenty of luxury cars, high-tech infrastructure and other gear across the world.
But now, the numbers are down across Europe.
The German manufacturing PMI fell to 54.9 from 57.7 last month, disappointing consensus forecasts of a much more subdued slide to 57.
French PMI fell to 52.5 and across the euro zone, manufacturing activity slowed to a level of just 52 — only marginally above the key 50-point level separating growth from stagnation.
This is not great fundamental news for the euro (quote), which obviously has overhanging issues of its own to deal with in the form of Greece and other credit-challenged situations.
Unlike China, Europe does not have a long chain of liquidity-tightening moves to blame. This looks to be a fall-off in demand, pure and simple.