Weekly Market Recap

Asia Pacific

03/06/2019

Week in review

Week ahead

3/06 – JP, CN, U.S. – Manufacturing PMI
5/06 – JP, CN, U.S. – Services PMI
7/05 – U.S. – Nonfarm Payrolls, Hourly Earnings

Thought of the week

Recent releases of flash Purchasing Managers’ Index (PMI) estimates for Japan, Eurozone and U.S., and China’s own official measure painted a gloomy picture for the global economy. All showed a drop in Manufacturing PMI, with Japan joining China into contraction level. Forward-looking components of the PMIs further hint that the slowdown may persist as businesses become hesitant amidst greater uncertainty as U.S. – China trade tensions re-escalate. The services sector, which had been a source of resilience, has begun to show cracks, with PMIs falling across the board. Particularly, flash estimates for the U.S. fell drastically from 53.0 in April to 50.9. Only China’s Services PMI showed an uptick of 0.2 points. Overall, the spread of the slowdown to the largely domestic dependent services sector poses wider implications to growth on the downside. Investors should monitor the final Markit PMI releases in the coming week for any affirmation of the trends suggested by the flash estimates.

Chart of the week

Source: J.P. Morgan Economic Research, Markit, J.P. Morgan Asset Management.
All returns in local currency unless stated otherwise.
*Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.

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