The Day at a Glance | May 21 2021

The Top

*European recovery draws strength in May.

*US proposes a minimum corporate tax of 15% at a global level.

*Economic indicators: PMIs are expected to be made public in the US (manuf. 60.2 e.; serv. 64.5 e.).

Economic environment

Timely PMIs for the Eurozone confirmed a faster recovery in the region during May. The larger part of the European economy (Composite PMI 56.9 vs 55.1 e.) continued to accelerate its recovery in May, boosted by the services sector. Services continued to accelerate their recovery by recording a larger than estimated rhythm of expansion (55.1 vs 52.5 e.), as the region emerges from the pandemic and restrictions on businesses are lifted. This is the highest level of acceleration in the sector in three years, while the progress made with vaccine programs and a firm increase in demand maintains optimism high for the next 12 months. Manufacturing activities, however, recorded a slight deceleration (62.8) in light of a scarcity of inputs and issues in the transportation of goods. The disruptions seen in productive and supply chains threaten to halt the sector`s recovery in addition to them causing a rise in prices. Sub-indices that follow the price of inputs and sale prices reached their highest levels since the survey`s existence, while some upwards pressures were seen in prices in the services sector. It`s estimated that inflationary pressures on goods will remain until supply is able to bypass the barriers caused by the disruptions. Moreover, the recovery could be faster in Europe and around the world if it weren’t for the disruptions seen in manufacturing activities – as these have impeded the supply of goods to adjust quickly to a growing demand.