Surveys show growth accelerating

US still leading the way

Chart of the Day

The US Composite PMI rose by 5.9 points in May to its highest level on record, at 68.1, which leaves it pointing to a sharp acceleration in GDP growth in Q2 to about 15% annualized. That would take GDP back to its pre-Covid level and there is lots of concern that any growth after that could put sharp upward pressure on inflation.


The US PMI continues to outpace those in Europe, but they have also improved lately.

In Canada, retail sales increased by 3.6% MoM in March, with annual growth at 23.7% YoY due to the base effect from the drop in sales in March 2020. Consumer confidence has weakened recently.

Retail sales growth has been even stronger in the UK where the country is re-opening.


It has been a mixed performance for EM currencies lately. South Africa’s rand has now regained its pre-Covid level against the USD, but the BRL and TRY have been weakening again.

It was a weak day for the most cyclical advanced economy currencies on Friday. Over the past week, they have lost much of their momentum against the USD, especially the AUD and NZD.

The two normal safe-havens of the JPY and CHF have been performing quite differently against the USD lately.

That represents the larger rise in bond yields in Switzerland, although it has been modest in the grand scheme of things.

The strong performance of Canada’s currency may be linked to rising long-term yields, with the 30Y-5Y spread now pulling away from that in the UK and Germany.

It was a weak day for the main cryptos on Friday, with ethereum dropping by over 18%. Both bitcoin and ethereum were also doing poorly over the weekend.

Like what you see? Please forward this email to your friends and colleagues, or use the button below to share it on social media. They can also follow us