Economic Snapshot for G7 Countries
May 6, 2020
Global economic growth to take a severe hit in 2020
The global economy will take a severe hit this year as the coronavirus pandemic has brought economic activity to a screeching halt across large swatches of the globe, including in Asia, Europe, and the United States. Uncertainty over the outlook is elevated, given the constant evolution of the pandemic and lack of clarity regarding when widespread lockdowns will be lifted.
Major Economies Monetary & Financial Sector News
Global price pressures are currently moderate due to low oil prices and weak demand, and these two factors will likely continue to keep inflation mild this year. That said, certain Latin American and African countries will still experience high inflation.
The Fed, BoC and BoJ left rates unchanged at their April meetings, but the BoC and BoJ ramped up asset purchases. The PBOC cut several interest rates in April. Central banks are expected to maintain an accommodative monetary stance this year in the face of the Covid-19 pandemic. In the G7, any further easing is likely to be via QE due to already rock-bottom interest rates.
Over the last month, the U.S. dollar lost ground against major currencies such as the CAD, CNY, EUR, GBP and JPY, likely driven by Federal Reserve measures to support dollar liquidity around the world, and a slight easing of safe-haven demand
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Major Economies Economic News
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France: Private sector activity contracts at a softer rate in May
June 3, 2020
The seasonally-adjusted IHS Markit Flash Composite Purchasing Managers’ Index (PMI) rose to 32.1 in May, after April’s 11.1 reading, which had marked an all-time low in the 22 years of data collection.
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Switzerland: GDP records largest contraction on record in Q1
June 3, 2020
GDP contracted 2.6% on a seasonally-adjusted quarter-on-quarter basis in the first quarter, contrasting the 0.3% expansion recorded in the fourth quarter and marking the sharpest contraction since the series began in 1980.
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United Kingdom: Housing market loses steam in May
June 2, 2020
According to the Nationwide Building Society (NBS), house prices in the United Kingdom fell 1.7% month-on-month in May, contrasting April’s 0.9% increase.
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Italy: Deterioration in manufacturing conditions eases on partial reopening in May
June 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) bounced from April’s record-low of 31.1 to 45.4 in May, amid a partial reopening of the economy.
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Canada: Manufacturing sector deteriorates at a softer clip in May
June 1, 2020
In May, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) increased from 33.0 in April to 40.6.
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