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The following is an extract from IHS Markit's latest Week
Ahead Economic Preview. For the full report (including Special
Reports) please click on the link at the bottom of the
article.
UK faces Brexit Day at end of week
FOMC and BoE decide monetary policy
US and Eurozone GDP
Bank of Japan document eyed for future policy changes
A week which sees the UK leaves the European Union is also
packed with policy action from the Fed and the Bank of England,
alongside GDP updates from major economies.
Brexit is high on the list of global concerns. Increasing market
jitters are expected as Brexit Day approaches at the end of the
week, with analysts assessing the ability of the UK government to
make trade deals with the EU before the transition period runs out
at the end of the year. The Bank of England also meets in the week,
and prospects of a rate cut hinge on British economic performance
at the start of the year.
In the US, where Fed policymakers meet during the week, the FOMC
looks set to continue sitting on its hands for an extended period
barring any material changes to the outlook. Nonetheless, rhetoric
from the press conference will be scrutinised by analysts for clues
as to future policy direction. Meanwhile fourth quarter GDP update
will be in focus as well, with expectations of steady growth during
the closing quarter of last year.
In the eurozone, updated GDP figures will likely provide
confirmation to expectations of subdued growth. The December PMI
surveys showed that the European economy closed out 2019 in its
worst spell since 2013, with near-stagnant demand and gloomy
prospects likely extending into the new year.
In Asia Pacific, BoJ summary of opinions will be scrutinised for
clues of the likelihood of tighter monetary policy following growth
forecast upgrades at the recent policy meeting. India's 2020 budget
will also be watched closely for any announcements of fiscal
measures amid a growth slowdown, while an updated official estimate
of FY19/20 GDP projection will be eagerly anticipated. Meanwhile,
China's government-sponsored PMI figures would provide clues as to
whether recent manufacturing recovery had gained pace.
Posted 24 January 2020 by Bernard Aw, Principal 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.
