Macroeconomics: The Day Ahead for 21 May 2026

Flash G7 PMIs top the day’s statistical schedule, with an unexpected drop in Australian Employment, robust Japan Trade and Nvidia results to digest ahead of the UK CBI Industrial Trends survey, US Housing Starts, Philadelphia Fed Manufacturing Index and weekly jobless claims, as US/Iran negotiations continue. UK finance Minister Reeves is due to announce a package of measures to east cost of living pressures, but while these may well help to cost increases, they are unlikely to lower prices for every day items and will also not address energy prices, with fiscal constraints obviously a key factor. The European Commission publishes its latest set of economic forecasts, tough as with the recent run of IMF/World Bank forecasts, these will be little more than guesstimates in the face of a broad range of uncertainties, with rather more interest in the informal meeting of EU finance ministers that starts today. Comments from BoJ’s Koeda overnight leaned hawkish, reinforcing the likelihood of a June rate hike, with a sprinkling of other central bank speakers also on tap. WalMart and Deere & Co. top the run of US corporate earnings, though market chatter will likely focus on the SpaceX filings ahead of its IPO.

While manufacturing sector headline readings continued to hold up well in the UK and Japan, though crumbled sharply in France. But this masks the more significant even if unsurprising sub-components showing input price pressures at 3.5-4.0 year highs, output prices rising sharply even if at a slower pace relative to costs, and employment continues to contract, above all in Services, where expectations continue to deteriorate. These elements will be key in this afternoon’s US report, which is expected to show headline Manufacturing holding at a solid 53.8 (April 54.5), and Services edging back higher to 51.2.