Breakfast offerings: What purchasing managers say

Workers install battery for new electric car model at Mitsubishi Motor Corps plant in Kurashiki, Japan May 19, 2022. REUTERS / Satoshi Sugiyama / File Photo

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A look at the coming day at markets from Sujata Rao

Indices based on the views of purchasing managers, essentially the people who buy products for companies, provide a comprehensive indication of the state of an economy. So with recession worries swirling, pre-June polls, which are expected Thursday throughout the developed world, have gained particular significance.

Japan has set a gloomy tone, showing factory growth at its lowest level in four months, and suppliers’ delivery times continue to extend. The European and US PMIs, as these indices are known, have fallen in recent months, steadily moving towards the 50 mark, indicating the separation between expansion and decline.

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This trend is expected to continue in June.

Neither the data nor the statements of policy makers have soothed the fear of a threatening growth funk. Fed Chairman Jerome Powell acknowledged the concern on Wednesday, but was aware that the bank will focus on getting inflation back to 2% – and actually commit to tightening policy, no matter what read more.

Similarly, recent Reuters polls forecast euro area rates of 0.75% at the end of the year, 1.25 percentage points above current levels. Read more .

An interesting shift is visible in commodity markets, especially those linked to economic growth.

Copper and oil have emerged so far, impenetrable to the darker outlook due to a tight supply picture. Now, however, Brent oil has fallen to low levels in mid-May to below $ 110 per barrel.

It supplies energy and material stores; popular with investors, as inflation soared, they could be avoided if recession replaces stagflation as the main scenario. Wednesday’s Wall Street session saw energy stocks fall 4.2% and world equities appear to have another weak day (.MIWD00000PUS).

The central banks will continue to plow, regardless of where Norway is expected to raise interest rates later, together with a large number of new markets. And Powell will be at the helm again, testifying before a House committee.

Key developments that should give more direction to the markets on Thursday:

-Indonesia has had rates of 3.5% read more

-Philippines increase by 25 bps to 2.5% read more

ECB Banking Supervisor Andrea Enria speaks

– Meeting at the Central Bank of Norway

European Council meeting (until 24 June).

-Mexico can raise interest rates by 75 bps to 7.75%

– Central Bank of Turkey

-Egypt seen rise rates of 50 bps to 11.75% read more

-US current account

-US 5-year TIPS auction

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Reporting by Sujata Rao; editing by Dhara Ranasinghe

Our standards: Thomson Reuters Trust Principles.

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