Week Ahead Economic Preview: Week of 9 Dec 2019

The following is an extract from IHS Markit's latest Week Ahead Economic Preview. For the full report (including Special Reports) please click on the link at the bottom of the article.

• FOMC meeting including updated projections and interest rate 'dot plot'
• First ECB meeting with Lagarde at the helm
• UK election, EU leaders' summit

After a week in which the business surveys provided key updates on the health of the global economy mid-way through the fourth quarter, the economic data take a back seat to policy and politics.

With the pace of global growth picking up to a four-month high in November according to PMI survey data, there are signs that the recent easing of monetary policy from many of the world's central banks has helped stem the slowdown, though the overall rate of expansion remains among the lowest since 2016. The coming week sees policy decisions from the FOMC and ECB, both of which have loosened policy this year to safeguard against the recent global headwinds and boost growth. Although both are expected to keep rates on hold, the economic projections and rhetoric will be scrutinised for clues as to future policy direction.

We see further stimulus from the ECB on the cards for early 2020, with Christine Lagarde having now taken over the helm, but the FOMC looks set to continue to sit on its hands for an extended period barring any material changes to the outlook.

Trade wars remain a key concern for the global outlook, and escalating tensions could set back the nascent improvement in the global growth trend. Developments in US trade with China, with new tariffs on Chinese goods set to kick-in on 15th December, will therefore be closely watched.

Brexit is also high on the list of global worries, and the upcoming UK general election on 12th December will be a key development in determining the outlook for the UK's departure from the EU. Polls are hinting at a Conservative party majority, which would lead to Brexit stepping up a gear. The EU Leaders' Summit will also be monitored for Brexit-related developments in particular.

In Asia Pacific, a raft of data for China, Japan and Taiwan will be eyed for signs of economic trends. Policy action will come from the Philippines, while a speech from RBA governor Philip Lowe will be parsed for clues about future policy direction.

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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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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.