Friday preview: Eurozone and US flash PMIs to give early GDP growth reading

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Friday preview: Eurozone and US flash PMIs to give early GDP growth reading

Thu, 22 June 2017
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Friday preview: Eurozone and US flash PMIs to give early GDP growth reading

(ShareCast News) - The UK corporate diary is all but empty on Friday, with most financial events happening away on foreign shores, with first 'flash' readings of June surveys for the eurozone and US.
These purchasing managers' index surveys from Markit cover the services and manufacturing sectors and will provide all-important signals of second quarter growth and price trends.

Overnight Japan will publish its manufacturing data, followed by individual reports for France and Germany, with the eurozone PMI at 0900 BST, with the consensus forecast for manufacturing PMI predicting an easing off of growth to 56.8 from the 57.0 in May.

The services PMI is expected to remain almost flat at 56.2 compared to 56.3 the prior month, to give a composite rading gor both measures of 56.6 versus 56.8 in May.

"The eurozone has led the developed world upturn, according to the PMI surveys, with the region enjoying its fastest growth for six years so far in the second quarter," said IHS Markit economist Bernard Aw.

"June's flash surveys will be eagerly anticipated to see how growth, and the business mood, has progressed, especially as the data were collected after the June 11 French elections."

US PMI's are scheduled for 1445 BST, with the manufacturing flash survey predicted to improve to 53.0 from 52.7, while the services PMI inches up to 53.7 from 53.6.

For the US, Aw said the surveys will provide indications as to whether widespread expectations of a rebound in second quarter GDP are justified.

"As has been the case in recent years, weak first-quarter growth in the US seemed to be linked to GDP not fully accounting for seasonality, and most forecasters (including IHS Markit) are expecting a reasonable rebound in the second quarter. However, while IHS Markit's PMI numbers up to May point to faster growth in the second quarter, the pace of expansion has remained only modest and suggests there are downside risks to second-quarter GDP forecasts of 3.0% or more."

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