Danske Bank

Today's key releases are the preliminary PMIs for the euro area, the UK and the US. We will look for signs whether we have seen a peak in manufacturing and whether activity is picking up in services amid the gradual easing of restrictions. We discussed the global manufacturing cycle with a lot of focus on the US in more detail in Research Global: Manufacturing cycle to peak in Q3, 21 June. We discussed the euro area manufacturing cycle in more detail in Research Euro Area - Tide is slowly turning for European manufacturing, 22 June. Besides that, we have some Fed and ECB speeches including from ECB President Lagarde. Senate Majority Leader Charles Schumer and House Speaker Nancy Pelosi (both Democrats) are meeting with White House officials today discussing the way forward on an infrastructure package.

ECB strategic review: According to a Reuters story yesterday, ECB policymakers are still apart on a new inflation strategy in connection with the ECB's strategic review. Especially, Reuters writes that they have yet to agree on a specific strategy on inflation overshoot. The hope is for a deal before a September decision on PEPP


PMI data from Euro area, UK and US today. In today's data harvest, we focus primarily on preliminary figures for the June Purchasing Managers' Index (PMI). The mood in the service sector appears to be improving thanks to the gradual easing of Covid-19 -related restrictions, which has led to increased mobility and demand for restaurant visits, hotels and travel. PMI for the manufacturing industry is expected to decline slightly but remain at a high level. The statistics are difficult to predict as they are disrupted by delivery delays, but the trend clearly shows a recovery, especially in the service sector. Our forecast applies to the euro area, but the pattern is similar throughout the EU. The Central Bank of the Czech Republic is likely to follow the decision of the Bank of Hungary yesterday and raise its policy rate today by 25 basis points to 0.50%. The situation in the two EU countries is different from that of the euro area, where the ECB sees inflation to remain well below its target in the medium-term.