Market movers today
• May PMIs are the key data releases today.
• Consensus expectation is for an unchanged US ISM manufacturing at 50.7 but we see potential for a slight improvement. If confirmed, this should fuel expectations further of Fed QE reduction this year. San Francisco Fed president John Williams will also be speaking this afternoon. Williams is one of the doves who recently have signalled willingness to consider scaling down QE.
• As the euro area PMI flash estimate has already been released (improved to 47.8), the most interesting part of today’s release will be the first estimate of manufacturing PMIs in Italy and Spain. We expect to see improvements in both, albeit from still depressed levels.
• UK manufacturing PMI is also expected to rise slightly, which would mark the third month of improvement. The Bank of England publishes funding for lending data for Q1. Any signs that the funding for lending programmes have been able to boost banks’ corporate lending could ease pressure for additional easing.
• In Scandinavia manufacturing PMIs are expected to have moved back above 50 in both Sweden and Norway.
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Danske Bank