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The following is an extract from S&P Global Market
Intelligence's latest Week Ahead Economic Preview. For the full
report, please click on the 'Download Full Report' link.
US, China retail sales and production data, plus UK inflation
and jobs
The week ahead finds a busy economic calendar alongside a series
of Fed appearances which remain in focus given uncertainties over
the pace of monetary policy tightening. Both US and China will
update retail sales and industrial production figures for April,
providing insights into second quarter GDP performances. In Europe,
eurozone Q1 GDP and inflation numbers will be due. Meanwhile UK
inflation and labour market data will be released to add clues as
to the challenges facing the Bank of England. GDP data releases
from some Japan, Thailand and Singapore are also lined up for the
week.
Market sentiment remains weak into mid-May amid concerns over
inflation, interest rates and economic growth outlooks. According
to the latest S&P Global Investment Manager Index, investors
remained risk averse in early May, citing monetary policy and
geopolitics as the biggest drags on US equity performance.
Following the latest Q1 earnings season, US equity investors also
further downgraded their corporate earnings expectations for Q2,
speaking to both the sensitivity of earnings to interest rates and
the worries over demand destruction as a result of higher
inflationary pressures and ongoing global developments. As such,
official April data due from the US and China - including retail
sales and industrial production - will be keenly watched in the
week ahead before we get May flash PMI figures from major developed
economies in the following week.
Meanwhile, UK inflation and labour market data for April will be
released in the coming week for a check on whether inflationary
pressures further worsened, as indicated by PMI data. Also watch
out for UK retail sales and consumer sentiment data to gauge the
degree to which households are being squeezed by the cost-of-living
crisis. This comes after the Bank of England raised rates once
again at its May meeting.
Looking back into Q1 performance, a series of GDP data will also
be due from the eurozone, Japan, Thailand and Singapore, with the
focus on Japan's data for indications of the extent to which GDP
likely contracted in the first quarter.
Global economy dependent on consumer services
Our special report featuring the latest
detailed sector PMI data shows the global economy being driven by a
rebound in spending on consumer services. Having been hit
especially hard during the pandemic prior to vaccine availability,
consumers in April were spending at one of the fastest rates seen
over the past decade as worries over the Omicron wave eased in most
major economies.
The problem is that all other major sectors of the global
economy have either stalled or are back in decline, having been hit
by soaring prices, supply bottlenecks and the diversion of spending
to services. That leaves the global economy reliant on a rebound in
consumer services, which by definition is temporary. Robust growth
will therefore likely require the supply shock and inflation to
moderate.
Key diary events
Monday 16 May Singapore, Indonesia, Thailand Market Holiday
Japan Corporate Goods Prices (Apr)
South Korea Export and Imports (Apr)
China (Mainland) Retail Sales, Industrial Output, Urban Investment
(Apr)
Eurozone Reserve Assets Total (Apr)
Canada Housing Starts (Apr)
United States New York Fed Manufacturing (May)
Canada Manufacturing Sales (Mar)
Canada Wholesale Trade (Mar)
Tuesday 17 May Norway Market Holiday
Australia RBA Meeting Minutes (May)
Singapore Non-Oil Exports (Apr)
Thailand GDP (Q1)
Indonesia Trade (Apr)
United Kingdom Labour Market Report (Apr)
India WPI Inflation (Apr)
Eurozone GDP (Q1, flash estimate)
United States Retail Sales (Apr)
United States Industrial Production (Apr)
United States NAHB Housing Market Index (May)
Wednesday 18 May
New Zealand PPI (Q1)
Japan GDP (Q1)
Australia Wage Price Index (Q1)
United Kingdom Inflation (Apr)
Eurozone HICP (Apr, final)
United States Housing Starts and Building Permits (Apr)
Canada CPI Inflation (Apr)
Thursday 19 May
Japan Machinery Orders (Mar)
Japan Trade (Apr)
Australia Employment and Unemployment Rate (Apr)
Malaysia Trade (Apr)
United States Initial Jobless Claims
Canada Producer Prices (Apr)
United States Existing Home Sales (Apr)
Friday 20 May
New Zealand Trade (Apr)
United Kingdom GfK Consumer Confidence (May)
Japan CPI (Apr)
Singapore GDP (Q1, final)
Germany Producer Prices (Apr)
United Kingdom Retail Sales (Apr)
Taiwan Export Orders (Apr)
Canada Retail Sales (Mar)
* Press releases of indices produced by S&P Global and
relevant sponsors
can be found here.
What to watch
North America: US retail sales, industrial production
data, Fed speakers, Canada April inflation
More Fed appearances are lined up in the coming week, in focus
amid persistent concerns over inflation and the monetary policy
outlook. Some key US economic data will also be released, including
April retail sales and industrial production. S&P Global US PMI
suggest that manufacturing output continued to expand at a strong
rate in April while services business activity growth moderated
from March, albeit remaining at a solid pace, as activity continued
to rebound after the loosening of pandemic restrictions, though
business confidence had deteriorated amid worries about inflation,
supply disruptions, and the Ukraine war.
Europe: Eurozone Q1 GDP, inflation data, UK inflation
and labour market reports
Revised Q1 GDP and April HICP readings from the eurozone will be
updated after preliminary data showed the economy growing just 0.2%
in the first three months of the year while inflation accelerating
to 7.5%.
In the UK, inflation and labour market data will take centre
stage. According to the
S&P Global / CIPS UK Composite PMI data, inflationary
pressures worsened in April while private sector firms continued to
expand staffing levels rapidly, though at a softer pace. Consumer
confidence and retail sales data will also be eagerly assessed for
the impact of inflation.
Asia-Pacific: China retail sales, industrial production
data, Japan, Thailand, Singapore GDP
Following trade and inflation data, China releases April
industrial production and retail sales figures in the coming week,
shedding more light on the impact of recent COVID-19 restrictions
on economic performance at the start of the second quarter. Amid
widespread lockdowns that continue affect the region, both retail
sales and industrial production data are expected to have
deteriorated compared to March. Early PMI data across both the
manufacturing and services showed output contracting very sharply
in April.
Separately, GDP figures from Japan, Thailand and Singapore will
also be released. Japan's Q1 performance will be watched for the
extent of the slowdown with our forecast pointing to a 0.6%
quarter-on-quarter (q/q) decline.
Special reports
Economic Downturn Spreads as More Sectors Report Falling
Output - Chris Williamson
APAC Region Faces Headwinds from China Slowdown and
Rising Inflation Pressures - Rajiv Biswas
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.
