Week Ahead Economic Preview: 3 August 2020
A full economic calendar for the coming week starts with worldwide PMI surveys and culminates in Friday's US non-farm payroll report, but also includes updates to GDP for Indonesia and the Philippines, trade data for the US, China, Brazil, Australia, Taiwan, Germany and France, as well as industrial production numbers for Germany, Italy, Spain and Malaysia. Central bank meetings in the UK, Australia, India, Russia and Thailand will also be in the spotlight, with the Bank of England under particular scrutiny after recent wranglings over recovery prospects.
Flash PMI: Global Economy on Road to Recovery from Pandemic
The world's largest developed economies saw business activity rise for the first time since February in July, as economies re-opened following the relaxation of restrictions designed to control the coronavirus disease 2019 (COVID-19) pandemic. However, both new orders and employment continued to fall, raising questions about the sustainability of the upturn after the initial rebound from lockdown. Performance varied by country, with Europe leading the upturn, the US stabilising and Japan lagging, though in all cases labour markets remain a particular concern.
Flash Japan PMI: Severe Downturn Persisting into July
Japanese business activity contracted further in July, according to flash PMI data, adding to concerns about the depth of the economic downturn and recovery speed relative to other countries as conditions remain challenging for many manufacturing and service sector companies due to the COVID-19 pandemic. Businesses continued to be adversely impacted in particular by subdued global trade flows and restrictions on travel, while the gradual reopening of the economy provided only a modest boost to demand.
CDX/iTraxx H1 Update 2020 – Performance, Record Volumes, Skews and Curves
The first half of the year resulted in significant credit volatility, with CDS indices playing a key role in investors' ability to manage credit exposure. As during the Global Financial Crisis, market disruption led to a surge in CDS index trading due to their ability to withstand large trading sizes. This came through in index volumes across CDX and iTraxx that were significantly greater YoY, along with large increases in tranched index trading.
Momentum in Asia Fights Off a Second Wave of Value in Europe and the US
Several regional equity benchmarks posted their best quarter in years on optimism that their economies are recovering from coronavirus shutdowns as restrictions are eased, while weighing the risk of a second wave in COVID-19 cases. The J.P.Morgan Global Manufacturing PMI provided one such positive economic data point, signaling that the global manufacturing sector downturn eased sharply in June after starting on the recovery path in May. Download report from our Research Signal team to find out more.
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