Week Ahead Economic Preview: Week of 21 August 2023

The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

Download full report

Flash PMI, Jackson Hole, BOK, BI meetings to watch

August flash PMI data will be unveiled next Wednesday for the earliest insights into economic conditions across major developed economies midway into the third quarter. On the central bank front, the Fed's Jackson Hole symposium will be eagerly anticipated for further Fed updates while monetary policy meetings also unfold in South Korea and Indonesia. Other highlights to watch on the economic calendar includes US durable goods data, GDP from Germany and Thailand and CPI readings in APAC economies.

The July US Federal Open Market Committee (FOMC) meeting minutes led to an intensification of rate hike concerns this week after Fed officials were observed to be considering more hikes in their bid to tame inflation. This comes just after the S&P Global Investment Manager Index outlined easing monetary policy worries from July, suggesting that sentiment again shift before next month's update, ahead of the September 19-20 Fed meeting.

That being said, we will get a clearer sense if greater risk aversion may be warranted with both verbal updates via the annual Jackson Hole symposium and data guidance through the August flash PMI figures next week. The August 24-26 gathering in Wyoming is expected to bring about a series of updates from central bankers and even if no concrete direction may be sought with regards to US monetary policy, the tone adopted can still influence market expectations. This is especially as recent US PMI price indices, while still pointing to subdued inflationary pressures compared to the post-pandemic peak, are indicating that inflation has remained rather sticky into the second half of 2023.

In APAC, we will also be watching the Bank of Korea and Bank Indonesia meetings though the consensus points to no surprises in the week ahead. Loan prime rates in mainland China may meanwhile be lowered after the medium-term lending facility (MLF) shift. As it is, growth momentum across the wider emerging markets region have moderated in July, affected by the same issues plaguing developed economies. Mainland China certainly saw support coming through to help spur economic conditions this week.

Sticky inflation situation

Next week's flash PMI release for major developed economies will provide the latest updates on growth after July data showed softening conditions for all but Japan among the "G4" economies. (See special report)

More importantly, the price indices will offer important clues on how inflation is evolving across these economies especially after July PMI data revealed sticky global inflation. The US and Japan notably saw faster rates of selling price inflation with the US gauge consistent with inflation running around the 3% level, validating some of the Fed's concerns over the pace of price increases.

Key diary events

Monday 21 Aug
Philippines Market Holiday
New Zealand Trade (Jul)
China (Mainland) Loan Prime Rate (Aug)
Germany PPI (Jul)
Thailand GDP (Q2)
Taiwan Export Orders (Jul)
Hong Kong Inflation Rate (Jul)

Tuesday 22 Aug
South Korea Consumer Confidence (Aug)
Eurozone Current Account (Jun)
Indonesia Current Account (Q2)
Taiwan Unemployment Rate (Jul)
United States Existing Home Sales (Jul)

Wednesday 23 Aug
Australia Judo Bank Flash PMI, Manufacturing & Services*
Japan au Jibun Bank Flash Manufacturing PMI*
UK S&P Global/CIPS Flash PMI, Manufacturing & Services*
Germany HCOB Flash PMI, Manufacturing & Services*
France HCOB Flash PMI, Manufacturing & Services*
Eurozone HCOB Flash PMI, Manufacturing & Services*
US S&P Global Flash PMI, Manufacturing & Services*
South Korea Business Confidence (Aug)
New Zealand Retail Sales (Q2)
Singapore Inflation (Jul)
Taiwan Industrial Production (Jul)
Taiwan Retail Sales (Jul)
Canada Retail Sales (Jun)
Eurozone Consumer Confidence (Aug, flash)
United States New Home Sales (Jul)

Thursday 24 Aug
South Korea PPI (Jul)
South Korea BOK Interest Rate Decision
Indonesia BI Interest Rate Decision
Hong Kong Trade (Jul)
United States Durable Goods Orders (Jul)
United States Jackson Hole Symposium

Friday 25 Aug
Japan Tokyo CPI (Aug)
Malaysia Inflation (Jul)
Thailand Trade (Jul)
Singapore Industrial Production (Jul)
Germany GDP (Q2, final)
Germany Ifo Business Climate (Aug)
United States UoM Sentiment (Aug, final)
United States Jackson Hole Symposium

* Press releases of indices produced by S&P Global and relevant sponsors can be found here.

What to watch

August flash PMI for major developed economies

Flash PMI data for August will be released for major developed economies in the coming week, including the US, UK, Eurozone, Japan and Australia.

While softening economic conditions has been a common theme across most of the four largest developed world economies (the "G4"), the pace varied between a deepening contraction in the eurozone and softening growth in the US and UK. Whether the majority of G4 economies remained in expansion will be watched with the upcoming flash data, which offers a first glimpse of August economic conditions based on approximately 85% of total PMI survey responses each month. Read more in this week's special report.

Americas: Jackson Hole symposium, US existing home sales, durable goods orders data

Following the release of the July US FOMC meeting minutes which showed the Fed contemplating more rate hikes amid inflation risks, greater attention will now be placed on the August 24-26 Jackson Hole Economic Symposium in the coming week for further insights into the Fed's thoughts.

Additionally, US existing home sales and durable goods orders data will also offer the latest insight on the housing market and industrial activity. As it is, July PMI data indicated that new orders within the US basic materials sector shrank at a markedly slower rate, improving from June.

Europe: Germany Q2 GDP, PPI and Ifo business climate

Besides the flash PMI readings for the UK, eurozone, Germany, France and Italy, a slew of tier-2 data are expected across Europe next week. Q2 GDP reading will also be updated for Germany after the first estimate showed the economy stagnating in the second quarter.

Asia-Pacific: BoK, BI meetings, China's loan prime rate, Thailand GDP, Singapore, Hong Kong CPI

In APAC, central bank meetings unfold in South Korea and Indonesia, though no surprises are expected. China's 1-year and 5-year Loan Prime Rates are expected to shift after the People's Bank of China (PBOC) lowered the rate of the one-year medium-term lending facility this week.

Separately, Thailand's Q2 GDP will be due on Monday, following by CPI from Hong Kong and Singapore in the week.

Special reports

Global Inflation and Growth: What to Watch for in the Upcoming August PMI Surveys - Jingyi Pan

India's Economy Continues to Show Strong Growth in Mid-2023 - Rajiv Biswas

Download full report

© 2023, S&P Global. All rights reserved. Reproduction in whole or in part without permission is prohibited.

Purchasing Managers' Index™ (PMI^®) data are compiled by S&P Global 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.

Learn more about PMI data

Request a demo

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.