The euro zone's powerful services sector has plumbed new depths and U.S. services are expected to show an accelerating decline, but Chinese manufacturing is displaying signs of bottoming out.
The Markit Eurozone Purchasing Managers Services Index (PMI) showed on Wednesday new business in the euro zone services sector, which accounts for the bulk of the economy, plummeted in February.
"It's certainly too soon to say that the recession has reached a trough. We are going to see another sharp fall in gross domestic product (GDP) this quarter," said Ben May at Capital Economics in London.
In contrast, China's manufacturing downturn showed tentative signs of bottoming out, a rare glimmer of hope for a world economy in crisis.
Britain's services sector also contracted sharply in February but the rate of decline eased for a third month in a cautious sign of optimism for the Bank of England before its rate-setting meeting on Thursday.
The United States reports its non-manufacturing PMI data at 1500 GMT, with analysts expecting the service sector to show the decline accelerated in February.
World stocks bounced as investors sought bargains after three days of losses. Hopes the Chinese government would step up its efforts to support the country's economy helped, as did a rise in the oil price through $43 a barrel.
"The market has been both a financial and emotional rollercoaster over the past fortnight. Investors are scrambling to find an area of support to help justify buying back in," said Chris Hossain, senior sales manager at ODL Securities.
MOOD GRIM
The overall economic mood was grim, however, with the International Monetary Fund warning late on Tuesday the global financial crisis had shifted to the world's poorest nations and 22 might need as much as $25 billion in additional funds this year to cope with the downturn.
The German Steel Federation said steel production was set to fall below 40 million tonnes for the first time since 1993 and the country's VDMA industry association said engineering orders in January showed the biggest monthly drop in 50 years.
Orders fell 42 percent on the year and foreign orders 47 percent, highlighting the impact the global downturn is having on Germany's export-orientated economy.
A study in the United States showed one in five U.S. homeowners with mortgages owed more to their lenders than their homes were worth.
The study released by First American CoreLogic forecast the rate would increase as housing prices dropped in states that had so far avoided the worst of the crisis.
BROWN PLEA
British Prime Minister Gordon Brown will plead for U.S. lawmakers to help to sort out the banking system and resist protectionism when he addresses Congress in Washington.
"I am going to say to Congress: 'Seize the moment when the whole of the world wants to work with America," Brown told reporters in Washington. He is there for talks with President Barack Obama on next months's G20 crisis meeting in London.
Brown wants the world to agree collective stimulus steps, but all eyes are on Beijing's efforts to revive growth in the world's third-largest economy.
The Chinese economy slowed sharply late last year and the government has pledged nearly $600 billion in extra spending to counter a collapse in exports and domestic property downturn.
The third monthly improvement in China's official PMI and the first rise in output since September suggested those efforts were beginning to bear fruit.
Both the Bank of England the European Central Bank (ECB) meet to decide on interest rates on Thursday with both widely expected to agree cuts.
The ECB is likely to cut its rates to an all-time low of 1.5 percent, while Britain's policymakers could chop another half a percentage point to a record low of 0.5 percent.
The European Union's executive arm responded to the crisis by proposing measures to make financial markets and institutions safer for investors.
"Our message is clear, we must send a strong signal to our citizens, businesses and the global community that there is a way out of this crisis," European Commission President Jose Manuel Barroso told a news conference in Brussels. The measures, which still needing the backing of the European Parliament and EU governments, range from tougher bank capital rules to streamlined supervision, more transparency in derivatives markets and proposals to ensure bank remuneration policies do not encourage excessive risk-taking.
