The following is an extract from IHS Markit's latest Week Ahead Economic Preview. For the full report (including Special Reports) please click on the 'Download Full Report' link.

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• Second quarter GDP releases include updates for the US and Eurozone
• US policy in spotlight as FOMC meets
• Key Asia trade and output releases accompanied by GDP for Hong Kong, Taiwan and Japan, plus China PMI

Insights into the depth of COVID-19 related economic downturns will be provided by second quarter GDP estimates for the US, Eurozone, Hong Kong and Taiwan, while the impact on companies will be revealed via earnings updates from no fewer than 833 firms. Policy action comes from the FOMC.

GDP data revealing economic recessions on scales not seen in post-war years are set to dominate the headlines. In the US, we are expecting an annualised GDP decline of around 35% for the second quarter (near double-digits in quarterly terms). While this should be followed by a rate of expansion of approximately 18% in the third quarter, renewed lockdowns pose a downside risk. Gauging the shape of the recovery will therefore dominate the FOMC meeting, from which markets will meanwhile be looking for more forward guidance about what it would take to keep the interest rates close to zero for an extended period (expected to be several years), and the extent to which inflation may be allowed to overshoot its target, or even whether yields on government securities might be targeted (page 3).

In Europe, second quarter GDP releases for the Eurozone will include national updates for Germany, France, Italy and Spain, all of which are also set to show eye-watering quarterly declines of roughly double-digit magnitude as COVID-19 lockdowns hit economic activity. Eurozone inflation numbers are also released while in the UK the main updates are for mortgage lending and consumer credit (page 4).

In Asia Pacific, Hong Kong SAR and Taiwan GDP for the second quarter are issued alongside a new estimate of first quarter growth in Japan. More timely monthly data for industrial production and trade are also updated for nations including South Korea, Thailand, Vietnam as well as Japan, which will help gauge recovery momentum as we head into the third quarter. The government-sponsored China PMI is also released and will give important clues as to the recovery path at the start of the third quarter (page 5).

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PMI commentary: Chris Williamson

Europe commentary: Ken Wattret

APAC commentary: Rajiv Biswas and Bernard Aw

© 2020, IHS Markit Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.

Posted 24 July 2020 by Bernard Aw, Principal Economist, Economic Indices, IHS Markit and

Chris Williamson, Chief Business Economist, S&P Global Market Intelligence and

Ken Wattret, Vice-President, Global Economics, S&P Global Market Intelligence and

Paul Smith, Ph.D., Director, Economic Indices, S&P Global Market Intelligence and

Rajiv Biswas, Executive Director and Asia-Pacific Chief Economist, S&P Global Market Intelligence and

Sian Jones, Senior Economist, Economic Indices, S&P Global Market Intelligence

Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit 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.

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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.