Flash May PMI surveys to provide new insights on global economy

The monthly round-up of PMI news comes at a time if increased focus on survey data. The publication of flash PMI surveys for the euro area, U.S. and Japan would be released next week and will give the markets significant new insights into central bank policy, noted IHS Markit.

The PMI data for euro area and Japan for May will provide clearer signs of whether first quarter economic softness would be temporary, and thus whether the ECB and Bank of Japan would stay focused on dialing back stimulus or begin worrying about new downside risks.

Similarly, the flash numbers would set the scene for the U.K. PMI data, which have likewise softened in recent months. The Bank of England also wants to see growth recover in the second quarter, otherwise it might be required to review its policy guidance of rates likely hiking again in 2018, stated Markit.

More clear-cut has been the U.S., where IHS Markit’s PMI surveys have hinted accelerating economic growth at the beginning of the second quarter, accompanied by increasing price pressures, the latter reaching a seven-year high in April. The U.S. surveys have high correlations with consumer price index, PCE and output growth, meaning solid survey data for May might add to the possibilities of a rate hike by the Fed in June.

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