Week Ahead Economic Preview: Week of 8 July 2019
- US inflation and FOMC minutes
- UK GDP and eurozone industrial production
- Export data for China and Taiwan
- Special reports on the G20 Summit trade truce and Eurozone inflation
The focus of the week will be the continued assessment of trade war developments following the G20 Summit (see special report on page 9), and the implications for central bank policy. The Trump-Xi trade truce came at the same time as global PMI surveys showed economic growth stuck at a three-year low in June, with manufacturing declining for the first time since 2012 as trade flows continued to deteriorate.
The global slowdown has added to expectations that central banks around the world will increasingly adopt more dovish stances, not least the US Fed. With the FOMC widely touted to cut interest rates at its July meeting, all incoming data will be scrutinised for last-minute policy signals. Updated inflation, job openings and inventory numbers accompany the minutes from the latest FOMC meeting (see page 3).
In Europe, GDP data for the UK will provide an updated official snapshot of the economy's health at the midway point of the second quarter. After a (Brexit-distorted) solid start to the year, both the PMI surveys and our nowcast models point to the economy slipping into contraction, which would raise pressure on the Bank of England to reconsider its hawkish stance relative to market rate expectations.
Meanwhile, official industrial production numbers for the Eurozone will likewise be eyed for additional evidence to support the ECB's recent dovish stance (see page 4). The persistence of stubbornly low euro area inflation forms the focus of our report on page 6.
In Asia, trade developments will remain a key theme, with analysts eyeing the export performance of China and Taiwan in particular, as well as industrial production and machinery orders data for Japan and China's vehicle sales. Singapore meanwhile releases an estimate of second quarter GDP and Malaysia's central bank weighs-up whether interest rates need to be cut again (see page 5).
Download the report for the full content which includes:
- Global overview
- Key diary events
- US week ahead
- Europe week ahead
- Asia Pacific week ahead
- Europe: Why persistent low inflation in the eurozone could end up being a major problem
- APAC: Another G-20 Summit, Another G-2 Trade War Truce
European and US PMI commentary: Chris Williamson
Europe commentary: Ken Wattret
APAC commentary: Rajiv Biswas or Bernard Aw
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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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