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Analysts from Danske Bank expect the US PMI to fall back in May and they don’t consider that FOMC minutes will change market’s perception of the monetary policy stance.

Key Quotes:

“In the US, Markit PMI’s for May are due for release on Wednesday. The Empire regional manufacturing survey rose in May, indicating a faster pace of growth than in April. At a national level, however, we expect manufacturing PMI to fall this month from 56.5 down to 55.8, as we still believe we are beyond the peak, so manufacturing growth will be lower but still positive. We expect services PMI to come in at 55.0, up from 54.6.”

“On Friday, capital goods orders figures are due for release. Overall, business investments have been increasing since 2016 but the past couple of month’s numbers have moved sideways – probably due to lower growth in the manufacturing sector.”

“The coming week also brings FOMC meeting minutes on Wednesday. We do not expect much news, as the Fed is continuing its gradual hiking cycle with two to three additional rate increases this year. However, we intend to keep an eye on why the Fed removed its phrasing about ‘monitoring inflation closely’.”