Market movers today
In the US , Markit PMIs for May are due for release. We expect manufacturing PMI to fall this month from 56.5 down to 55.8, as we still believe we are beyond the peak, so manufacturing growth will be lower but still positive. We expect services PMI to come in at 55.0, up from 54.6.
Today also brings FOMC meeting minutes. We do not expect much news, as the Fed is continuing its gradual hiking cycle with two to three additional rate increases this year. However, we intend to keep an eye on why the Fed removed its phrasing about 'monitoring inflation closely'.
In the euro area we expect the PMI, which has moderated recently, to yield another 'softer' reading across countries. It will be interesting to follow the manufacturing PMI and see the potential impact of the spill over of the ongoing trade spat in the US. So far, we expect it to be relatively benign.
In the UK, CPI figures for April are due out. Inflation is falling back towards 2%, as the impact of GBP depreciation fades. How fast it falls back will be an important factor for how fast the Bank of England tightens monetary policy.
To read the entire report Please click on the pdf File Below: