Friday, May 21 is a busy day for the financial markets, chiefly because lots and lots of PMI reports are due.
Australia’s flash PMIs for May show modest growth in industrial production and a slight contraction in services compared to last month.
In contrast, in Germany the services sector did slightly better than expected, with the flash PMI rising to 52.8 versus a forecast of 52. However, the manufacturing and composite indices failed to meet investors’ expectations.
Despite Germany’s failures, the eurozone-wide PMIs were better than the forecasts, indicating that a broader recovery is indeed taking place in Europe.
The United Kingdom performed in a mixed way. The services PMI was disappointing, while the manufacturing one was better than expected; the composite index met the forecast exactly as the two other numbers balanced out.
Later today we expected the manufacturing PMI from the United States as well.
Other notable publications today included Japan’s inflation rate report for April (-0.4%), which showed that the deflationary processes in the country are rather strong. Furthermore, retail sales data out of the UK was positive. Canada will also publish its retail sales report later, while the eurozone delivers its latest consumer confidence estimate.
Following the developments surrounding cryptocurrencies, today Bitcoin and other assets in this class are stabilizing slightly, despite a statement earlier from Treasury Secretary Janet Yellen that all crypto transactions over $10,000 will need to be properly accounted for and regulated like cash operations of that amount.
Yellen is also proceeding with her plans of implementing a global minimum tax on all corporate earnings. She proposed a tax of 15%. Though the European Union previously seemed supportive of the idea, it remains to be seen whether it will back this number.
Furthermore, today US stock indices are set to extend yesterday’s gains. They have rallied thanks to higher than expected continuing jobless claims yesterday, which implied that the Federal Reserve will need to maintain its current approach to monetary policy for a while yet in order to support the recovery of the labor market in the United States.
