Week Ahead Economic Preview: Week of 2 November 2020

The following is an extract from IHS Markit's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

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• US presidential elections
• US non-farm payrolls
• Global PMI surveys

The US presidential elections - described by some commentators as perhaps the most important in modern history - take centre stage in a week which also sees some key economic data releases which will give insights into how the global economy is faring amid second waves of COVID-19 infections.

Monetary policy meetings also take place in the US, UK, Australia and Malaysia, while the earnings season progresses with 1,465 firms reporting (including Paypal, Softbank, Qualcomm, Alibaba, Volkswagen, Toyota, Total, Bayer, AstraZeneca and Berkshire Hathaway).

The FOMC concludes its next policy meeting on 5th November, just two days after the presidential election, which could well prove inconclusive and contested. No action is therefore generally expected in terms of policy changes, so the dataflow in the coming week will likely take prominence. In that respect, the monthly employment report is accompanied by PMI data for both manufacturing and services. Flash surveys showed the US economy gaining underlying growth momentum, linked to the further loosening of COVID-19 containment measures during the month. However, with virus numbers reaching new highs, the survey also showed some weakness in consumer markets, and that the job market recovery cooled, hinting at softer non-farm payroll gains. The jobless rate is nonetheless widely expected to fall further (page 3).

In Europe, policymakers at the Bank of England meet amid signs of the Bank's growing appetite for more stimulus, including further asset purchases, especially following news of economic recoveries faltering in the UK and Eurozone. The latter even saw a renewed contraction as COVID-19 containment measures were tightened again. Final PMI data for the region will therefore be eagerly awaited, providing more detail on national and sector trends (page 4).

In Asia, analysts will await PMI data surveys to assess the recovery momentum in mainland China especially, but also to see if signs of a more widespread recovery of manufacturing in the region have persisted, linked in turn to reviving global trade flows. Monetary policy decisions will come from Australia and Malaysia, with expectations having risen for both central banks to add more stimulus (page 5).

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PMI commentary: Chris Williamson

Europe commentary: Ken Wattret

APAC commentary: Rajiv Biswas and Bernard Aw

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Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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