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

As usual, the turn of the month promises to be a busy week for economic data releases and markets alike.

Worldwide manufacturing PMIs will be in the spotlight following the release of the flash PMIs. Recent PMI data have highlighted the 'vaccine dividend' driving strong growth in the US and Europe while many other countries continue to struggle with the fight against the virus, notably including Japan and India. However, strong recoveries are being accompanied by rising inflation amid supply shortages, so we will be keen to see if new supply chain delays due to further virus waves might further darken the inflation outlook (see also our special report on page 4).

Meanwhile, with heightened sensitivity towards the Fed since the June FOMC meeting, we will get a look at the US employment picture via the June jobs report. While the Fed had emphasized the transitory nature of inflation, Fed chair Jerome Powell's acknowledgement of the risk that inflation may be higher than earlier expected is congruent with the signals from PMI data. That said, the longer-term inflation picture will to a large extent be determined by the amount of labour market slack and wages growth.

Flash eurozone inflation figures will also be released ahead of the Japan Q2 Tankan survey and an update on the UK's first quarter GDP. Also watch out for US factory orders, eurozone unemployment and various activity indicators out of Japan, including retail sales and industrial production.

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PMI commentary: Chris Williamson, Jingyi Pan

Europe commentary: Ken Wattret

APAC commentary: Rajiv Biswas

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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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