“Uncertainty is the big buzzword for central banks,” Carsten Brzeski, ING Diba chief economist, said on Bloomberg Television. “Maybe if all these external risks turn out benign, then we might see another move by the Fed, another attempt by the ECB to normalize. But judging from today, the probability that all these risks will have a benign outlook is pretty low.”

Bond markets around the world have responded to the weaker outlook. The average yield on securities in the Bloomberg Barclays Global-Aggregate Index fell this week to the lowest since April, and Japanese bond yields dropped to two-year lows Thursday.

“There is no sense that yields will rise anywhere around the world,” says Takafumi Yamawaki, head of Japan rates and foreign-exchange research at JPMorgan Chase & Co. in Tokyo.

That makes this year's V-shaped recovery in global equity markets all the more striking as traders bet on a resolution to the U.S.-China trade dispute.

In the Eurozone, the manufacturing Purchasing Managers Index (PMI) dropped to a level consistent with contraction. IHS Markit, which compiles the report, said the 19-nation economy may struggle to register growth much above 0.1 percent this quarter.

Orders fell for a second month, with companies citing “global trade protectionism worries, Brexit, the downturn of the auto sector, increased political uncertainty.”

But there were some positives. Services proved a bright spot, and it pushed the overall composite PMI to a three-month high. France also offered some support, reporting a better-than-forecast PMI that may hint at a stabilization.

What Bloomberg Economists Say…

“After five consecutive months of decline, the small rebound in PMIs will provide a glimmer of hope to the ECB Governing Council as staff update projections ahead of the March 7 monetary policy meeting. Still, the readings remain low.”  — Maeva Cousin, Bloomberg Economics.

For Skou, his peers, and global manufacturing as a whole, this week's figures show that a truce in the U.S.-China trade war can't come soon enough. The latest reports are that negotiators are working on multiple memorandums of understanding that would form the basis of a final trade deal, though no breakthrough is expected during talks this week.

“We see a world economy that is growing less this year than last year and a lot of trade tensions,” Skou said on Bloomberg Television. “Negotiations are ongoing between the U.S. and China. It seems like they have positive momentum for now, but we don't believe that's the last of trade tensions because the U.S. also wants to have a discussion with Europe.”

Copyright 2019 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.