UK: Markit/CIPS PMIs could be quite influential for sentiment – RBC CM

The research team at RBC Capital Markets explains that the UK’s Markit/CIPS PMIs could be quite influential for sentiment, as last month’s strong surveys for April cast doubt on the significance of the weak Q1 GDP report.

Key Quotes

“Another set of robust numbers would make the Q1 slowdown seem potentially transitory, whereas softer data would instead leave the April upturn looking like a positive blip amidst mounting evidence of a slowing economy. Our economists’ central expectation remains that the consumer-led slowdown will be more durable, so our bias is to look for a pullback in the PMIs to confirm this. For manufacturing, we look for 56.9 this time, from 57.3, and for construction 52.0, from 53.1. The allimportant services PMI comes the following week.”