Data on retail sales and production in the United States and China, as well as inflation and employment in the United Kingdom

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Data on retail sales and production in the United States and China, as well as inflation and employment in the United Kingdom

The week ahead finds a busy economic calendar as well as a string of Fed appearances that remain in focus given uncertainties over the pace of monetary policy tightening. The United States and China will update retail sales and industrial production figures for April, providing insight into second-quarter GDP performance. In Europe, the first quarter GDP and inflation figures for the Eurozone will be expected. Meanwhile, UK and labor market data will be released to add clues to the challenges facing the Bank of England. GDP data releases from , , and are also in line for the week.

Market sentiment remains weak through mid-May due to concerns about inflation, interest rates and the outlook for economic growth. According to the latest S&P Global Investment Manager Index, investors remained risk averse in early May, citing monetary policy and geopolitics as the main drags on US stock performance. Following the latest Q1 earnings season, U.S. equity investors also lowered their Q2 corporate earnings expectations, reflecting both earnings sensitivity to interest rates and concerns about demand destruction due to higher inflationary pressures and ongoing global developments. As such, official April data due from the US and China – including retail sales and industrial production – will be closely watched in the coming week before we get the flash PMI numbers. of May of the major developed economies the following week.

Meanwhile, UK inflation and labor market data for April will be released in the coming week to test whether inflationary pressures have worsened further, as indicated by PMI data. Also pay attention to data from the UK and consumer sentiment to gauge how squeezed households are by the cost of living crisis. This comes after the Bank of England raised rates again at its May meeting.

Looking at first quarter performance, a series of GDP data will also be expected from the Eurozone, Japan, Thailand and Singapore, with a focus on data from Japan to indicate how much GDP probably contracted in the first quarter.

A global economy dependent on consumer services

Our special report showing the latest detailed sectoral PMI data shows that the global economy is being driven by a rebound in spending on consumer services. Having been particularly hard hit during the pandemic before vaccines became available, consumers in April were spending at one of the fastest rates seen in the past decade, as concerns about the Omicron wave eased in most countries. great savings.

Global PMI Index

The problem is that every other major sector of the global economy has stagnated or is in decline again, having been hit by soaring prices, supply bottlenecks and the diversion of spending towards services. This leaves the global economy dependent on a rebound in consumer services, which by definition is temporary. Robust growth will therefore likely require that the supply shock and inflation moderate.

S&P 500 Global PMI Production Index

S&P 500 Global PMI Production Index

Calendar key events

Monday May 16
Singapore, Indonesia, Thailand Holiday Market
Japan Business Property Prices (April)
South Korea Exports and Imports (April)
China (Mainland) Retail Sales, Industrial Production, Urban Investment (April)
Total euro area reserve assets (April)
Housing starts in Canada (April)
United States New York Fed Manufacturing (May)
Manufacturing sales in Canada (March)
Wholesale in Canada (March)

tuesday may 17
Norway Market Holiday
Australian RBA Meeting Minutes (May)
Singapore non-oil exports (April)
GDP of Thailand (Q1)
Indonesian Trade (April)
UK Labor Market Report (April)
India WPI Inflation (April)
Eurozone GDP (Q1, flash estimate)
U.S. retail sales (April)
US Industrial Production (April)
NAHB US Housing Market Index (May)

Wednesday May 18
New Zealand PPI (T1)
Japan’s GDP (Q1)
Australia Wage Price Index (Q1)
UK inflation (April)
Euro area HICP (April, final)
Housing starts and building permits in the United States (April)
CPI inflation Canada (April)

Thursday May 19
Machinery orders in Japan (March)
Japan Trade (April)
Australian employment and unemployment rates (April)
Malaysia Trade (April)
Initial unemployment claims in the United States
Producer prices in Canada (April)
US Existing Home Sales (April)

Friday May 20
New Zealand Trade (April)
GfK UK Consumer Confidence (May)
CPI Japan (April)
Singapore GDP (Q1, final)
Producer prices in Germany (April)
UK retail sales (April)
Taiwan Export Orders (April)
Retail sales in Canada (March)

* Index press releases produced by S&P Global and relevant sponsors are available here.

What to watch

North America: US retail sales, industrial production data, Fed speakers, Canadian inflation in April

More Fed appearances are expected over the coming week amid continued concerns about inflation and the outlook for monetary policy. Some key US economic data will also be released, including April and . The S&P Global US PMI suggests that manufacturing output continued to grow at a healthy pace in April, while growth in service business activity moderated from March, but remained at a steady pace. sustained, with activity continuing to rebound following the easing of pandemic restrictions, although business confidence has deteriorated. amid concerns about inflation, supply disruptions and the war in Ukraine.

Europe: Eurozone Q1 GDP, Inflation Data, UK Inflation and Labor Market Reports

Revised readings of the eurozone’s first quarter GDP and April HICP will be updated after preliminary data showed the economy grew just 0.2% in the first three months of the the year while inflation accelerated to 7.5%.

In the UK, inflation and labor market data will take center stage. According to data from the S&P Global/CIPS UK Composite PMI, inflationary pressures worsened in April as private sector companies continued to rapidly increase their workforce, albeit at a slower pace. Consumer confidence and retail sales data will also be eagerly assessed for the impact of inflation.

Asia-Pacific: China Retail Sales, Industrial Production Data, Japan, Thailand, Singapore GDP

Following trade and inflation data, China releases April and week-ahead figures, further highlighting the impact of recent COVID-19-related restrictions on economic performance at the start of the month. second trimester. Amid the widespread shutdowns that continue to affect the region, retail sales and industrial production data are expected to deteriorate from March. Early PMI data on both commodities and services showed a very sharp contraction in production in April.

Separately, GDP figures from Japan, Thailand and Singapore will also be released. Japan’s performance in the first quarter will be watched for the extent of the slowdown, with our forecast pointing to a decline of 0.6% QoQ (q/q).

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