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The following is an extract from IHS Markit's latest Week
Ahead Economic Preview. For the full report, please click on the
'Download Full Report' link.
European GDP data updates for Germany, France and Spain plus UK
labour market update
Fourth quarter GDP releases for Taiwan, Hong Kong SAR, South
Korea and the Philippines
A busy week of fourth quarter GDP releases also includes the
first FOMC meeting of the year. The GDP data will be scoured for
clues as to how much economic growth momentum has been sustained
among the further virus waves, while the FOMC meeting will be eyed
for any changes to the Fed's outlook.
US policymakers showed signs of becoming more update at the last
FOMC meeting, and recent news of the growing prospect of additional
fiscal stimulus and vaccine roll-outs could see some Committee
members even more bullish, fueling more discussion in the markets
of when asset purchases could start to be tapered. However, the
focus is likely to remain on the need for policy to stay
accommodative at least into 2022. A near-term test will be the
extent to which GDP growth was sustained in the fourth quarter.
Surveys such as the PMI had been relatively buoyant in the closing
months of 2020, but the rate of expansion will have slowed markedly
from the third quarter, when the economy rebounded from the
lockdowns seen in the first wave of the pandemic (page 3).
In Europe, fourth quarter GDP are also released for Germany,
Spain, France, Austria and Belgium. Survey data have shown the
eurozone succumbing to renewed virus-fighting measures, though the
economy looks to have fared better than during the second quarter
thanks to manufacturing resilience and the lockdowns not having
been as severe as earlier in the year. Germany appears to have
fared especially well, though even here a slight downturn may well
have been seen. In the UK, the labour market is in focus, with
jobless data in particular eyed for clues as to the long-term
pandemic impact (page 4).
A range of key indicator for Japan will be assessed for the
impact of rising virus cases, while GDP releases from Asia will
provide fourth quarter economic insights into Taiwan, South Korea,
Hong Kong SAR and the Philippines. All look to have seen growth
slow compared to the third quarter, with the possible exception of
a more resilient Philippines, but importantly renewed downturns
look likely to have been avoided thanks in part to resurgent growth
of manufacturing and trade (more on page 5).
Rajiv Biswas, Executive Director and Asia-Pacific Chief Economist and
Sian Jones, Economist, Economic Indices, IHS Markit
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.
