And finally, after a late flurry, the UK’s FTSE 100 index has ended the day 75 points higher at 6,320 points, a gain of 1.2%.

That’s its highest closing level since 10 June.

Steel maker Evraz was the top riser, up 8%, followed by Standard Life Aberdeen (+6.3%), Just Eat (+4.9%) and silver producer Fresnillo (+4.7%). Optimism over the prospects for economic recovery also lifted asset manager M&G and retailer Kingfisher by over 4% each.

European stocks also had a good day, led by Germany where the DAX gained over 2%.

Traders were cheered by today’s better-than-expected PMI reports, which showed UK factories inching back to growth and a general pickup in France and Australia.

Relief that relations between the US and China appear to be holding up also lifted the markets, as David Madden of CMC Partners explains.

Stocks are in positive territory as traders have welcomed the news that lockdown restrictions in England will be eased from 4 July. The changes will allow pubs, restaurants, cinemas and galleries to re-open. In addition to that, the social distancing rule of staying two metres away from people, will be reduced to one metre. The update didn’t come as a shock as there was speculation about this for a while, but it was welcomed nonetheless.

Stocks were already up on the session in advance of the lockdown announcement. President Trump had to clarify that US-China trade relations were intact after Peter Navarro, one of his trade advisors, said otherwise. The confirmation that trading relations were good acted as a boost to sentiment, and it helped distract traders from the health crisis.

That’s all for today. Thanks for reading and commenting. GW

The publisher of Q magazine is in advanced talks to sell the music monthly and four other titles, and cease publication of three others including Planet Rock, as the coronavirus pandemic hastens the digital transition of readers and advertisers.

Last month the German-owned Bauer Media, one of the UK’s biggest publishers which also owns titles including Grazia and Empire, said that it was reviewing the future of 10 magazines.

The company says it is in advanced talks with several companies to sell Q, Car Mechanics, Modern Classics, Your Horse and Sea Angler. Acquirers could include Future Publishing, the UK’s biggest magazine proprietor following the £140m takeover of TI Media, home to brands including Wallpaper and Country Life, which has grown rapidly via acquisitions in recent years.

Bauer said that is it closing three magazines - Simply You, Practical Photography and Planet Rock magazines as they are “unlikely to be sustainable after the crisis”.

Mother & Baby magazine is to shut its print edition and move to a digital and events based model, and Golf World and Today’s Golfer will be merged.

Chris Duncan, chief executive of UK publishing at Bauer, says:

“In order to protect the long-term health of our publishing business we have had to make tough decisions about the future of some much-loved titles.”

Robert Alster, head of investment services at wealth manager Close Brothers Asset Management, says the US economy is still weak, despite the pick-up in June’s PMI:

“The PMI data in the US is showing signs of improvement, but with both services and manufacturing coming in below 50 we must not forget that things are still getting worse – albeit at a slower rate than before. Manufacturing is likely to bounce back fastest – while factories may be operating under capacity due to newly imposed social distancing measures, having staff back in the building at all is a huge step forward.

“The recovery of the service sector relies on consumer confidence improving, and with some US states reporting a resurgence of Coronavirus cases, the resumption of normal behaviour is still a while off. Even with shops and restaurants reopening, consumers are self-regulating to stay safe. Across the world, governments and businesses alike are grappling with the same question; how to get people spending, and fast. With the Presidential election looming on the horizon, this question is more urgent for Trump than most of his global peers”

Alan Tonelson of RealityChek agrees that the economic situation remains poor - even though things may be bottoming out:

And here’s Chad Moutray of the National Association of Manufacturers:

Newsflash: America’s economy continued to shrink this month, but at a much slower rate than in May.

The ‘flash’ US PMI index, just released, has risen to 46.8, from 37.0 in May - close to the 50-point mark showing stagnation.

It suggests a much slower slowdown, particularly in manufacturing as factories reopened their doors.

Data firm Markit says the slump has ‘eased markedly’, as we’ve already seen in the UK, the eurozone and Australia today.

As more firms and states began to reopen following the coronavirus disease 2019 (COVID-19) outbreak, offsetting weak demand faced by many other companies, the overall pace of decline eased among goods producers and service providers.

New business across the private sector declined further in June, albeit at only a marginal pace. Despite many firms noting a rebound in client demand, some stated that renewals and requests for new business were historically muted.

The US stock market has opened higher, with the tech-focused Nasdaq index hitting a fresh all-time high.

The Nasdaq index has gained 81 points, or 0.8%, to 10,137 points, as it continues to surge back from its slump in February and March. Apple is up 1% after it announced its next operating system, Big Sur, and a move from Intel chips to its own semiconductors.

Investors continue to pin their hopes on an economic recovery, despite reports of rising Covid-19 cases in some US states.

European stock markets are pushing higher, as this morning’s PMI reports bolster confidence that economies will recover from the pandemic.

Britain’s FTSE 100 index of blue-chip shares has gained 80 points, or 1.1%, to 6,323 - the highest in almost two weeks. Traders are pleased that factory output has picked up, and hoping to hear new lockdown easing measures from the government soon.

France’s CAC is up 1.7%, after investors heard that its factories and service sector companies had stopped shrinking this month.

And Germany’s DAX is 2.7% higher, even though its PMI came in below 50 (meaning contraction). Investors are shrugging off the coronavirus outbreak at a German meat processing factory, and pinning their hopes on a wider return to economic normality.

There’s also relief that the White House has rowed back on the overnight comments about trade relations with China, which caused some brief panic....

Britain’s economy won’t return to the old days, even once the Covid-19 pandemic has ended.

Many firms will have changed their working patterns dramatically, and won’t reverse all these changes - either because they fear another lockdown or simply because new remote-working methods work well.

And that will include changes in the City of London and Canary Wharf, the government believes.

Reuters has the details:

Some banks will cut office space in London’s financial district as they “reset” their operations following the COVID-19 pandemic, Britain’s financial services minister said on Tuesday.

“Some of the banks will reduce their physical footprint in terms of their square footage in the City,” John Glen told an online event held by New Financial think tank.

That may please financial workers who have got used to home-working over the last three months (although those juggling work and home-schooling might be pining for the office...)

Duncan Brock, group director at CIPS, is encouraged that UK factories returned to growth this month - just (a PMI of 50.1 is barely over stagnation).

But the wider economy still appears to be shrinking, he points out:

Services remained weakened and still in contraction and there are deep concerns about how the end of furlough support will affect employment levels in the next few months.

In general, this is good news for the UK economy, but in terms of any significant recovery, 2020 is likely to be a write-off. The following year may see some more stability and real growth as the pandemic’s effects continue to ripple through the remainder of 2020.

Economist Shaun Richards argues that the Services PMI should be over 50 as well -- surely May was a stronger month than April?!

Thomas Pugh of Capital Economics suspects the businesses who provide data for the PMI reports are comparing conditions to normality, rather than strictly answering the question:

The nature of the PMIs makes them tricky to interpret at the moment, but the rise in the composite PMI from 30.0 in May to 47.6 in June (consensus 41.0) suggests that the further easing in the lockdown on 15th June has led to a further rebound in economic activity after the sharp fall in April.

Taken literally the fact that the flash composite PMI remained below the no-change level of 50 in June suggests that activity fell further as it should compare activity to the previous month. But many respondents appear to be comparing activity in June to its normal level. So the rise in the composite PMI suggests that activity continued to recover in June, but that it is still well below normal.

Phil Aldrick of The Times agrees that the UK economy is far from normality:

Newsflash! UK factories have returned to growth this month, as the Covid-19 recession eases.

The ‘flash’ manufacturing PMI, which tracks activity across the sector, has jumped to 50.1 this month from 40.7 in May. Crucially, that’s just above 50-point mark showing stagnation.

Activity across the services sector is still shrinking, though, but at a slower rate -- with a PMI of 47.0, up from May’s alarmingly weak 29.0.

Markit says this shows “a vastly improved overall picture across the UK private sector”, with output steadying after the spring slump.

Company bosses reported that the easing of lockdown measures in recent weeks has helped them to return to work, with operations resuming in a number of sectors and staff returning from furlough.

However, companies also reported that underlying demand remained “very subdued”, as clients had slashed spending since the pandemic started.

Chris Williamson, chief business economist at IHS Markit, says the UK economy is moving towards growth again:

“June’s PMI data add to signs that the economy looks likely return to growth in the third quarter, especially given the further planned easing of the lockdown from 4th July. June saw a record rise in the PMI for a second successive month, confirming that the economy is moving closer to stabilising after the worst of the immediate economic impact from the COVID-19 pandemic was felt back in April.

But, the longer term recovery prospects remain highly uncertain, he adds, given the restrictions and social distancing measures that must need to stay in place until an effective treatment or vaccine is available.

“Uncertainty over recovery prospects and job prospects also mean demand for many goods, especially non-essential bigticket items, is likely to remain weak for many months, with Brexit uncertainty also continuing to cast a shadow over the economy. “Our forecasting team therefore expects the economy to contract by 11.9% this year before expanding by a relatively modest 4.9% in 2021, which is far more cautious than the 15% surge anticipated in 2021 by the Bank of England.”

More reaction to follow...

Just in: the eurozone recession has eased “markedly” this month, with companies reporting that the slump in activity has slowed.

The Eurozone PMI Composite Output Index, which tracks services firms and factories across the region, has jumped to 47.5 in June from 31.9 in May.

That suggests the eurozone economic downturn is bottoming out, says data firm IHS Markit, thanks to the strong data from France earlier this morning.

However... a reading below 50 shows another contraction - although nowhere near as dramatic as in April and May.

Markit explains:

Output fell again in both manufacturing and services, the latter showing the slightly steeper rate of decline. Both sectors nevertheless reported markedly reduced rates of contraction for a second month running.

The ongoing downturn in output was linked to a fourth consecutive monthly deterioration of inflows of new business, which in turn contributed to a further steep decline in backlogs of orders for companies to work through.

The slump in Germany’s economy is slowing, in another encouraging signal.

The German flash PMI index, just released, has risen to its highest level since the lockdown began.

However, it’s still below the crucial 50-point mark which separates growth from contraction. This suggests activity is still falling across German factories and service sector firms, though at a slower rate.

• Flash Germany PMI Composite Output Index at 45.8 (May: 32.3). 4-month high.
• Flash Germany Services PMI Activity Index at 45.8 (May: 32.6). 4-month high.
• Flash Germany Manufacturing PMI at 44.6 (May: 36.6). 3-month high
• Flash Germany Manufacturing Output Index at 45.8 (May: 31.7). 4-month high.

Data firm Markit says there are “increasing signs of life” in Germany’s economy, with new orders falling at a slower rate and business confidence picking up.

Just in: France’s economy has returned to growth this month, as some of the Covid-19 lockdown measures are eased.

Data firm Markit reports that private sector activity in France rose for the first time in four months during June. Encouragingly, output growth was recorded in both the manufacturing and service sectors.

Here’s the details:

• Flash France Composite Output Index at 51.3 in June (32.1 in May), four-month high
• Flash France Services Activity Index at 50.3 in June (31.1 in May), four-month high
• Flash France Manufacturing Output Index at 55.5 in June (36.3 in May), 28-month high
• Flash France Manufacturing PMI at 52.1 in June (40.6 in May), 21-month high

Any reading over 50 shows growth, so this shows a pick-up in French output this month compared to May (which was a grim month).

However.... firms still reported a drop in new business and a rise in layoffs.

But bosses do seem more optimistic about their economic prospects.

Markit says:

There was renewed optimism among French private sector firms, with sentiment towards the 12- month business outlook moving into positive territory for the first time since February. Confidence was seen across both monitored sub-sectors, although it was slightly stronger at service firms. Anecdotal evidence suggested that optimism was driven by hopes of an economic recovery following the further loosening of coronavirus-related restrictions.

Overnight, the markets got a quick attack of the heebie-jeebies after the White House appeared to suggest the US-China trade deal was in trouble.

Trade adviser Peter Navarro triggered the panic by telling Fox News that relations between the two sides were “over”. This triggered volatility in the markets, with US stock futures plunging and riskier currencies wobbling.

The turmoil prompted Navarro to row back on the comments, claiming he was ‘misquoted’ (he was actually talking live on TV....). President Trump also tried to calm the situation, insisting the Phase One trade deal was secure.

But the episode is a reminder that markets are still jittery about trade relations, and the impact of the Covid-19 crisis on relations between Washington and Beijing.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Today we’ll learn whether the world economy is starting to recover from the Covid-19 slump.

New surveys of purchasing managers from the UK, the US, and across Europe are expected to show that the downturn is easing this month, after historically bad slumps in April and May.

And encouragingly, we’ve got evidence that Australia’s economy appears to be growing again. The Australian PMI index has rocketed back to 52.6, from 28.1 in May, driven by a rise in activity in the services sector.

That’s the highest level in nine months, with many firms reporting a rise in new business.

Gareth Aird, head of Australian economics at CBI (who produce the report), says Australia’s economy seems to have turned the corner, even though firms are still cutting jobs.

“The June PMIs are consistent with our view that we are now past the low point in economic activity. Overall conditions are still very soft, but there were a few encouraging pieces of information in the PMIs.

Confidence has improved in both the manufacturing and services sectors. And the lift in both input and output prices is welcome as it suggests we are more likely to be in a period of disinflation rather than deflation. The further decline in employment was disappointing, but given the lagging relationship between employment and output it is not surprising. We should see headcount lift from here.”

The picture isn’t quite as bright in Japan, though. It’s PMI has risen this month, to 37.9 from 27.8, showing the downturn is slowing. However, a PMI reading below 50 shows the economy is still shrinking (mainly driven by Japan’s struggling manufacturing sector).

But any increase in the PMI surveys is encouraging, given the scale of the Covid-19 recession.

CMC Markets’ Michael Hewson explains:

Today’s latest June flash manufacturing and services PMIs for France, Germany and the UK, are another set of leading indicators that should see further gains from the record lows seen in April, and the subsequent improvements seen in May.

Optimism over a rebound in economic activity across Europe gained traction in May when there was a decent rebound from the record lows seen in April when economic activity collapsed sharply, in the wake of the lockdown measures.

The agenda

• 9am BST: Flash eurozone manufacturing and services PMIs for June. Expected to rise to 42.2 from 31.9
• 9.30am BST: Flash UK manufacturing and services PMIs for June. Expected to rise to 41 from 30
• 2.45pm BST: Flash US manufacturing and services PMIs for June. Expected to rise to 48 from 39.8
• 3pm BST: US home sales in May. Expected to rise by 3.5%