PMIs can play an integral role in generating timely estimations of global export trade, with data often published m… https://t.co/yiVIZD3RVe
Week Ahead Economic Preview: Week of 8 June 2020
The following is an extract from IHS Markit's latest Week Ahead Economic Preview. For the full report (including Special Reports) please click on the 'Download Full Report' link.
- FOMC meeting and US economic projections
- Eurozone and UK GDP updates
- China data on credit and M2
A key event of the week ahead will be the latest FOMC meeting with updated US economic projections, while Europe sees important GDP and industrial production releases to give guidance on the depths of second quarter economic downturns in the UK and Eurozone respectively. In Asia, markets will be looking for clues as to the extent to which the Chinese economy might be reviving and also eagerly await trade and industrial production numbers across Asia Pacific.
The US FOMC meeting comes on the heels of the ECB unleashing an additional €600bn boost to its lending programme. With the COVID-19 pandemic having already taken a huge toll on the US jobs market and set to cause a record collapse in GDP in the second quarter, markets will be looking closely for any change in the Fed's stance alongside its updated economic projections, which will set out the expected depth of recession and speed of recovery. At its prior meeting, the FOMC held interest rates at near zero, but the minutes revealed that policymakers are prepared to adjust their stance, including elements of its various emergency lending programs, in response to evolving financial conditions. Inflation data for the US are also released, together with consumer sentiment numbers for June.
In Europe, markets will be eyeing GDP data in the UK and industrial production numbers in the Eurozone for further clues as to the depth of the economic downturns in the second quarter, which PMI surveys indicate will be the largest on record, albeit with signs of the rate of contraction cooling in May. We'll also be eagerly awaiting developments from the Eurogroup as to the coordination of stimulus to fight the COVID-19 fuelled downturn across the region.
In Asia, credit and money supply will be a key release for China as insights are sought as to the pace of recovery as China's economy continues to open up, having relaxed virus-related restrictions earlier than other countries. Trade data for Taiwan will also provide an interesting bellwether for wider Asia trade trends in the wake of the pandemic.
PMI commentary: Chris Williamson
Europe commentary: Ken Wattret
APAC commentary: Rajiv Biswas and 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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