Week Ahead Economic Preview: Week of 6 May 2019
- Worldwide PMI surveys accompany various central bank meetings
- China trade and US-Sino trade talks
- UK first quarter GDP, US inflation
Service sector PMI surveys will provide an important steer on worldwide economic growth trends, and could influence policy direction at key central banks where the stance has generally turned more dovish. Central bank decisions in Australia, New Zealand, Thailand, Malaysia, the Philippines and Brazil will all be eyed for fresh clues as to policymakers' assessments of the current economic environment and the latest policy trends.
The recent global PMI surveys have indicated an on-going trade-led downturn to have continued to hit manufacturers, but growth has been supported by resilient service sectors. However, early 'flash' PMI surveys for the Eurozone and US hinted that the slowdown showed signs of spreading to services in April, raising alarm bells for the near-term growth outlook.
Key to the manufacturing slowdown has been increased trade protectionism and heightened political uncertainty, in turn often linked to rising protectionism, as well as worries about slower growth in China. In that respect, further US-Sino trade talks will be eagerly watched for a potential easing in the trade spat.
Similarly, China's trade data will be published alongside both NBS and Caixin PMI surveys, updating the picture of whether China's recent strengthened economic growth rate will prove short-lived, as many expect.
In the US, with the FOMC growing more worried about inflation running below target, inflation data will be keenly awaited. Conversely, the Bank of England stands alone among the major central banks in adopting a more hawkish stance, and updated GDP data will help determine whether such optimism is warranted.
Our special report this week looks at how the current Japanese government is hoping to deal with the long-term challenges facing the country as it seeks to mitigate the impact of demographic change and an aging population in the new Reiwa era (see page 6). The minutes from the Bank of Japan's latest policy meeting will also be parsed for further clues as to how policymakers believe they can push inflation higher.
Download the report for the full content which includes:
- Global overview
- Key diary events
- US week ahead
- Europe week ahead
- Asia Pacific week ahead
- Asia Pacific Special Report
APAC commentary: Rajiv Biswas or Bernard Aw
European and US PMI commentary: Chris Williamson
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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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- PMI signals further near-stalling of global manufacturing at start of second quarter
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