A busy week ahead is lined with central bank meetings in Japan and Malaysia while labour market and inflation data… https://t.co/yUw58ojLkp
Week Ahead Economic Preview: Week of 31 May 2021
A busy week is packed with manufacturing and services PMIs around the globe and rounds off with the May US labour market update. The news flow will be anticipated eagerly by market observers keen to assess the pace of economic recovery. For central bank watchers, the reserve banks of Australia and India will update their monetary policy decisions in the coming week, albeit with no changes to rates expected.
Key takeaways from the most recent flash PMI updates had been the continuation of the COVID-19 pandemic's influence on economic conditions, and especially variations in vaccination progress. While US and European growth surged with the reopening of their economies, Japan slipped back into contraction amid its fourth virus wave. With Asia having seen several other economies come under the threat of COVID-19 resurgences and reimposed containment measures, most notably India but also previous success stories such as Taiwan and Singapore, the surveys will be eyed for further divergences in economic trends.
Supply constraints and associated price rises also remain a major concern, with several key PMI price gauges hitting new highs according to the May flash data. The data will be scrutinised for signs of demand and supply coming back into balance, as this will likely hold the key to how long the steep rise in inflationary pressures will last. A concern is that further COVID-19 disruptions in Asia could deal a further blow to supply chain recovery hopes.
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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.
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