- Q1 GDP updates to take back seats to more timely survey data to gauge Q2 growth
- China PMI for May
- Eurozone and US inflation updates
The week ahead sees a fresh estimate of US GDP in the first quarter, for which the decline is expected to be unrevised at a 4.8% annualised rate. Other GDP updates, including for India, Singapore, Taiwan, Germany, France and Italy, are also widely expected to show a similar picture of economies already hit hard by the COVID-19 pandemic in the first quarter.
However, these declines will be eclipsed by what's to come in the second quarter as lockdowns intensified in April. PMI surveys showed a record global economic contraction in April, pointing to recessions on unprecedented scales. Attention has thus turned to recovery paths, which will inevitably be determined by various factors including the speed with which the pandemic can be controlled, the timelines for an effective treatment or vaccine, the extent that lockdowns can be eased, the degree to which demand will continue to be affected, and the effectiveness of monetary and fiscal policy to support output and jobs. In this respect, flash PMI data for May showed rates of economic contraction easing markedly in the US, Europe and Japan, albeit remaining in steep decline, as lockdown restrictions started to be eased.
We will therefore be looking for further evidence to corroborate the PMI message that rates of decline bottomed out in April, including May updates to regional Fed business surveys and the University of Michigan consumer survey in the US (page 3).
In Europe, European Commission sentiment data for May are likewise set to provide corroborative evidence that most countries remained in decline but are showing some signs of picking up in May (page 4).
In Asia, the NBS China PMI will be eagerly awaited to gauge the extent to which weak global demand is dampening the recovery. Policy action is expected to come in the form of a rate cut at the Bank of Korea. Other key data include April retail sales and industrial production for South Korea and Japan (page 5).
Inflation trends will meanwhile be gauged via the eurozone flash CPI estimate and PCE prices in the US. Both are expected to show weakened price trends.
"Disclaimer: The intellectual property rights to these data provided herein are owned by or licensed to Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.
In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trademarks of Markit Economics Limited or licensed to Markit Economics Limited. Markit is a registered trade mark of Markit Group Limited."