Quiet day…unless you are Theresa May or Donald Trump.
The global economy is on course for a robust second quarter, according to PMI survey data. The JPMorgan Global PMI™, compiled by IHS Markit from its various national surveys, edged up from 53.6 in April to 53.7 in May. The latest reading is in line with the average seen so far this year and a level which is broadly consistent with global GDP growing at an annual rate of 2.5%.
Robust rates of economic growth were signalled across both the emerging markets and the developed world, though the former remained somewhat “decoupled”, with the pace of expansion remaining below that seen in the rich world, continuing the trend evident since 2013. While the Emerging Market PMI rose to 52.2 in May, its second highest in 32 months, the Developed World PMI held steady at 54.3.
China PMI adds to signs of Q2 slowdown
The Chinese economy gained a little momentum in May, but the upturn was insufficient to quell widespread expectations of softer GDP growth in Q2. The headline Caixin China PMI rose slightly from 51.2 in April to 51.5 in May, but that was the second-weakest reading in eight months. There was an encouraging pick-up in services activity to the fastest since January, but the headline manufacturing PMI fell below 50, signalling decline, for the first time in nearly a year.
Average prices charged by firms for their goods and services fell for the first time since February of last year. The worry is that reduced pricing power may affect company profits, which could in turn have a renewed impact on growing corporate debt levels.
Inflationary pressures start to ease
One of the big changes in the global PMI surveys came in the price data. Worldwide factory input prices showed the smallest rise since last September. Prices charged at the factory gate also registered the smallest increase for eight months, suggesting that lower cost pressures could also feed through to consumer prices as retailers see pressure come off wholesale prices.
However, a further lengthening of global supplier lead-times suggests that some underlying upward pressure on prices persisted in May, as demand often outstripped supply.
From Credit Suisse via The Daily Shot:
Source: @wef; Read full article