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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.
January global PMIs, US jobs data, BOE and ECB meetings
Worldwide manufacturing and services PMIs will
be released in a busy week ahead filled with key economic data such
as the US jobs report and eurozone GDP and
inflation. Central bank meetings in the UK and
eurozone will also unfold. All of which happens while a
large part of Asia, including China, will be away for Lunar
New Year holidays.
Global markets are being rattled by mounting concerns over
inflation and the US Federal Reserve's increasingly hawkish stance.
The January US jobs report will therefore be eyed for further clues
as to the recent strength of the labour market, which the Fed
alluded to in its latest Federal Open Market Committee (FOMC)
statement. According to flash PMI data, US firms continued to hire
at a solid clip in January, with many reporting rising staff costs
amid labour shortages.
The final worldwide PMI survey data will be therefore also be
watched for further clues on the growth, supply chain and price
outlook after flash PMIs alluded to slowing developed world growth
at the start of 2022 as the Omicron wave hit. How the latest
Omicron wave has affected the supply chain, notably in Asia, and if
global price pressures continued to ease from December 2021 will be
in focus.
In Europe, the ECB and BOE hold monetary policy meetings. While
the ECB is expected to remain on hold, the market will be looking
closely for signs that the mood could be turning more hawkish.
Markets are meanwhile pricing in another hike from the UK central
bank following the December surprise hike to 0.25%.
The Great Supply Chain Disruption
Supply chains used to be something that only supply chain
managers talked about. Now they are of deep concern to everyone
from consumers waiting for their deliveries to retailers, major
manufacturers, prime ministers and presidents, and of course
central banks.
The highly synchronized global supply chain system developed
over the past 30 years is under strain like never before and
resolving the disruption will be less a "sprint" and more of a
"marathon" that runs well into 2022. This is the first major
disjunction in the highly-integrated supply chain system that has
developed over the last three decades of globalization. The intense
new debate on inflation adds to the urgency to understand what is
ahead for supply chains in 2022.
"What is unfolding in supply chains globally is not only
disruptive, it is also historic," says Daniel Yergin*, vice
chairman, IHS Markit and editor of a new report from IHS Markit
entitled The Great Supply Chain Disruption: Why it
Continues in 2022.
While COVID-19 has been a significant factor in driving the
disruptions—with the current Omicron variant creating new
uncertainties—it is not the only factor, the report says.
Substantial capacity, logistical and labour challenges also exist
beyond the pandemic.
The report includes key insights and observations from IHS
Markit experts on manufacturing, shipping and logistics,
automotive, oil, agriculture, labour and materials, as well as ESG
and geopolitical strains.
* Daniel Yergin, vice chairman of IHS Markit, is a Pulitzer
Prize winning author. His latest book is "The New Map: Energy,
Climate, and the Clash of Nations."
Key diary events
Monday 31 Jan China (Mainland), South Korea, Taiwan Market Holiday,
Singapore, Malaysia Market Holiday (Partial)
Japan Industrial Output and Retail Sales (Dec)
United Kingdom Nationwide House Price (Jan)
Eurozone GDP Flash (Q4, prelim)
Germany CPI (Jan, prelim)
Canada Producer Prices (Dec)
Tuesday 1 Feb China (Mainland), South Korea, Singapore, Indonesia, Malaysia,
Taiwan Market Holiday
Worldwide Manufacturing PMIs, incl. global PMI* (Jan)
Japan Unemployment Rate (Dec)
Australia RBA Cash Rate (Feb)
Indonesia Inflation (Jan)
Germany Unemployment Rate (Jan)
United Kingdom Mortgage Lending and Approvals (Dec)
Eurozone Unemployment Rate (Dec)
Canada GDP (Nov)
United States ISM Manufacturing PMI (Jan)
Wednesday 2 Feb China (Mainland), South Korea, Singapore, Malaysia, Taiwan
Market Holiday
Eurozone HICP (Jan, flash)
United States ADP National Employment (Jan)
Thursday 3 Feb China (Mainland), Taiwan Market Holiday
Worldwide Services & Composite PMI, incl. Japan, Brazil,
Eurozone, India* (Jan)
Australia Trade Balance (Dec)
Eurozone Producer Prices (Dec)
United Kingdom BOE Bank Rate (Feb)
Eurozone ECB Deposit and Refinancing Rate (Feb)
United States Initial Jobless Claims
United States ISM non-manufacturing PMI (Jan)
Indonesia GDP (Q4)
Friday 4 Feb China (Mainland), Taiwan Market Holiday
Australia RBA Monetary Policy Statement
South Korea CPI Growth (Jan)
Thailand CPI (Jan)
Germany Industrial Orders (Dec)
United Kingdom Markit/CIPS Construction PMI* (Jan)
Eurozone Retail Sales (Dec)
United States Non-Farm Payrolls, Unemployment Rate, Average
Earnings (Jan)
*Press releases of indices produced by IHS Markit
and relevant sponsors can be foundhere.
What to watch
Worldwide manufacturing and services PMIs
Amid the spread of the COVID-19 Omicron variant, worldwide
manufacturing and services PMIs will be watched intently next week
for indications of how the global economy has fared at the start of
2022.
A common theme that emerged was the disruption to output as
COVID-19 conditions worsened, even though demand appeared to have
held up on balance across the G4 economies. On the other hand,
price trends varied at the start of 2022, with easing raw material
price inflation contrasting with rising service sector prices. The
upcoming data will therefore be watched in particular for
indications of the supply situation out of Asia and the
corresponding implications for prices.
North America: January jobs data
The turn of the month brings the January jobs report from the
US, with the market currently pencilling in a stronger 238k
addition for non-farm payrolls, while the unemployment rate comes
in at 3.9% and average hourly earnings grow by 0.5% month-on-month.
The latest
IHS Markit Flash US Composite PMI pointed to firms expanding
their workforce numbers in January despite challenging labour
market conditions. This pace of jobs growth will be closely watched
amid the market's concern with the rising interest rates
outlook.
Europe: BOE, ECB meetings, eurozone GDP and
inflation
The Bank of England (BOE) and European Central Bank (ECB) both
meet for the first time in 2022. No change to rates is expected
from the ECB though the current consensus points to the BOE hiking
the bank rate by 0.25% to 0.50% at the upcoming meeting. Key
economic releases for the eurozone meanwhile include Q4 GDP and
January 'flash' inflation.
Special reports:
Flash PMIs Signal Sharp Slowing in Developed World Growth at
Start of 2022 as Omicron Wave Hits - Chris Williamson
Philippines to Become USD 1 Trillion Economy by 2033 - 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.
