After the new trade spat, what’s next for global economy?
|Market movers ahead
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In the trade dispute between China and US, we expect markets to look for signs of negotiations restarting.
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In the US, the preliminary PMI for May is likely to be affected by the weak global backdrop.
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In the euro area, the PMI is likely to show a small uptick from the current low level, while the German ifo number may already reflect the trade uncertainty.
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In the UK, the EU elections could inflict a heavy defeat on the conservative party and increase pressure on Prime Minister Theresa May to resign.
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In Japan, we estimate Japanese GDP fell 0.4% q/q in Q1.
Weekly wrap-up
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The trade spat between the US and China has calmed down a bit and markets are looking for a potential new meeting to be set up.
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Prime Minister Theresa May plans to attempt to get her Brexit deal through in the week beginning Monday 3 June.
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In Germany, Q1 GDP growth rebounded to 0.4% q/q, after narrowly avoiding a recession in H2 18.
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Risk sentiment has been fragile this week following the escalation of the trade war.
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