Global Copper Users PMI Output Index dips to decade low at start of 2019, presenting a further sign of slowing grow… https://t.co/mnRNlUzomu
Economic Review - Week of 9 July 2018
- New monthly GDP for the UK
- Eurozone industrial output data eyed for rebound
- Inflation numbers updated for the US and China
- Malaysia's new central bank head chairs first policy meeting
Some of the highlights of the week ahead include fresh official data on economic growth trends in the UK and Eurozone as policymakers look for signs of their economies rebounding. Inflation data in the US, China and some euro members will also be scoured for the impact of tariffs and higher oil prices, and for evidence that core pressures may be picking up. Malaysian and South Korean central banks will meanwhile meet to set interest rates.
New UK GDP data
New monthly GDP numbers are launched in the UK and will show the situation up to May. The data are widely expected to follow the profile of the PMI surveys, and therefore show growth rebounding from a soft patch centered around March. The PMI surveys, which are already available up to June, show the economy having gained further momentum at the end of the second quarter, suggesting the economy expanded 0.4% in the three months ot June after a 0.2% rise in the first quarter. However, low levels of business optimism, resulting from Brexit uncertainty, continue to flash warning lights about just how sustainable such solid growth will be.
Eurozone rebound eyed
Data will also be eyed for signs of a second quarter rebound in the Eurozone. Official industrial production data have shown manufacturing output declining sharply in the three months to April, painting a far darker picture than the PMI surveys. However, a jump in German official output and order book data in May have kindled hopes of a second quarter strengthening. Official Eurozone output data for May will likely follow this improving trend. Official export data for Germany will also add insight to how the eurozone's largest economy is faring amid escalating trade tensions.
Inflation data for the US, China, Germany, France and Spain will provide updates on the potential pass-through of higher oil prices and tariffs to consumers, which have pushed up global business cost at the fastest rate for seven years, according to the PMI surveys. However, more interesting from policy-making perspectives will be the extent to which core prices have increased, with core pressures remaining relatively subdued in most cases to date.
New Malaysian bank governor
Malaysia's new central bank governor is at the helm for her first monetary policy meeting. However, the policy interest rate is widely expected to remain at 3.25% next week, and possibly for the rest of the year, despite some depreciation in the ringgit. While latest PMI data point towards further deterioration in manufacturing conditions, analysis of the data suggests that second quarter GDP growth remains fairly resilient, yet slower than previous quarters. Inflationary pressures have also come off the boil after the GST was scrapped following the recent elections.
Download the report for a full diary of key economic releases.
Chris Williamson, Chief Business Economist, IHS Markit
Tel: +44 207 260 2329
Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.
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