ECONOMICS COMMENTARY — Jan 29, 2021
Week Ahead Economic Preview: Week of 1 February 2021
By Chris Williamson, Ken Wattret, Paul Smith, Ph.D., Rajiv Biswas, and Sian Jones
The following is an extract from IHS Markit's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link
- Worldwide manufacturing and services PMIs
- US non-farm payrolls
- Central bank rate setting meetings include the UK, Australia and India
- Eurozone fourth quarter GDP
A full economic calendar for the week kicks off with worldwide PMI surveys and closes with the monthly US nonfarm payroll report. Sandwiched between are policy decisions from three of the world's major central banks.
The PMI surveys will be closely watched, having shown escalating risks of double dip recessions in the eurozone and UK as tightening COVID-19 restrictions constrain economies again, albeit to markedly lesser extents than in early 2020. Global growth has shown encouraging resilience though, thanks to sustained strong expansions in many other economies, notably including the US and China. The weak spot remains consumer services, and in particular cross-border services, such as travel and tourism ( a full overview of the December PMIs is available here).
For the US, economic insights into the performance of the economy from the IHS Markit and ISM manufacturing and services PMIs are accompanied by the official labour market data. Analysts are anticipating a renewed rise in nonfarm payrolls after the slide into decline recorded in December, but the jobs numbers are expected to remain subdued compared to prior months in the recovery.
In Europe, the Bank of England is expected to follow in the footsteps of the FOMC, stressing the need to policy to remain accommodative long into the future as the pandemic poses ongoing risks. In the UK, Brexit disruptions have added to the country's third lockdown woes, driving output sharply lower in January.
Similarly in Asia, the reserve banks of India and Australia are likely to lean towards dovish stances. Although both economies have shown strong rebounds since the initial impact of the pandemic, policymakers remain worried about the potential for renewed weakness amid further waves of the virus either at home or abroad. Supply delays have also muddied the water for policymakers somewhat, meaning recent PMI data will also be eyed for indications that supply constraints and associated spike in prices for many goods will have started to ease.
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PMI commentary: Chris Williamson
Europe commentary: Ken Wattret
APAC commentary: Rajiv Biswas
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.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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