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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
As usual, the turn of the month promises to be a busy week for
economic data releases and markets alike.
Worldwide manufacturing PMIs will be in the
spotlight following the release of the flash PMIs. Recent PMI data
have highlighted the 'vaccine dividend' driving strong growth in
the US and Europe while many other countries continue to
struggle with the fight against the virus, notably including Japan
and India. However, strong recoveries are
being accompanied by rising inflation amid supply shortages, so
we will be keen to see if new supply chain delays due to further
virus waves might further darken the inflation outlook (see also
our special report on page 4).
Meanwhile, with heightened sensitivity towards the Fed since the
June FOMC meeting, we will get a look at the US employment
picture via the June jobs report. While the Fed had
emphasized the transitory nature of inflation, Fed chair Jerome
Powell's acknowledgement of the risk that inflation may be higher
than earlier expected is congruent with the signals from PMI data.
That said, the longer-term inflation picture will to a large extent
be determined by the amount of labour market slack and wages
growth.
Flash eurozone inflation figures will also be
released ahead of the Japan Q2 Tankan survey and
an update on the UK's first quarter GDP. Also
watch out for US factory orders, eurozone unemployment and various
activity indicators out of Japan, including retail sales and
industrial production.
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.
