April 22, 2020
Tomorrow brings weekly jobless claims with consensus looking for 4.25MM vs 5.245MM last week. There’s no debate that the global economy is in free-fall, but tomorrow’s April flash PMI data (Japan, UK, Eurozone and US) might give us a sense for the bottom and maybe regional divergences. Normally, we more heavily rely on manufacturing PMI as an indicator of overall activity, but given the circumstances, we expect services data will play a much bigger role. Keep in mind that PMI data is a ‘diffusion’ index that measures the breadth of activity, not magnitude. Consensus is looking for: 1) Eurozone manufacturing of 39 vs 44.5 in March and Services of 24 vs the prior 26.4; 2) UK manufacturing at 41.5 vs 47.8 and Services of 30 vs 34.5; 3) US manufacturing 38.5 vs prior month at 48.5 and Services at 32.5 vs 39.8. And tomorrow’s EU Leaders’ meeting should have implications for bond yields and credit spreads based on Italy’s decision whether or not to access the ECB’s ESM.