Investors will be scrutinising the latest healthchecks on companies across the world today, for signs that the US-China trade war is hurting the global economy.
And… the latest purchasing manager’s survey data has shown that China’s service sector activity growth has hit a seven-month low, as business confidence fell to the lowest since early in the Covid-19 pandemic.
The Caixin China General Services Business Activity Index, released this morning, fell to 50.7 in April, down from 51.9 in March. That shows the slowest rise in activity since last September – but still above the 50-point mark that signals stagnation.
China’s service sector firms reported a slowdown in new business, while business sentiment fell to the lowest level seen since February 2020, while companies continued to cut staffing levels.
The report says: "The slowdown in business activity growth reflected the trend seen for new business. Disruptions to goods trade amid fresh tariffs had negatively impacted some service providers in April, according to anecdotal evidence, and led to the slowest rise in overall new work for 28 months.
"New export business increased only fractionally, with some firms noting improved foreign demand amid rising tourism activity."
Data yesterday showed that the US services sector’s growth picked up in April, while the prices paid by American firms for materials and services jumped, indicating that the tariffs announced by the Trump administration are fuelling inflation.
The financial markets are looking for progress in trade talks between the US and its trading partners. Yesterday, treasury secretary Scott Bessent told CNBC that he believes the US is “very close to some deals".
Bessent explained:“As President Trump said last night on Air Force One, maybe as early as this week.”
He added that there could be “substantial progress in the coming weeks” with China; last week, Beijing signalled it was “assessing” potential trade talks with the U.S.
America’s car industry is calculating the cost of the trade wars.
Overnight, Ford Motor suspended its annual guidance, due to “tariff-related uncertainty”, and estimated new tariffs would cost it about $1.5bn (£1.1bn) of profits this financial year.
Ford CEO Jim Farley told analysts: “It’s still too early to fully understand our competitors’ responses to these tariffs.”
“It’s clear, however, that in this new environment, automakers with the largest US footprint will have a big advantage.”
Last week, Donald Trump’s 25% import tax on engines, transmissions and other key car parts came into force, a move that will push up costs for automakers.
Ford had previously predicted it would post earnings before interest and taxes of between $7bn and $8.5bn this financial year.
But with uncertainty over how the trade war will play out, Ford told investors that guidance was now suspended, explaining: "Given material near-term risks, especially the potential for industrywide supply chain disruption impacting production, the potential for future or increased tariffs in the US, changes in the implementation of tariffs including tariff offsets, retaliatory tariffs and other restrictions by other governments and the potential related market impacts, and finally policy uncertainties associated with tax and emissions policy, the company is suspending guidance."
The agenda
• 9am BST: UK car sales data for April
• 9am BST: Eurozone services sector PMI report for April
• 9.30am BST: UK services sector PMI report for April
• 3.10pm BST: US RCM/TIPP Economic Optimism Index
We'll be tracking all the main events throughout the day …
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UK should not fear trade with China – but it needs to keep risks in check 
