Macroeconomic & Geopolitical

Europe Moves from Strength to Strength

June 2021 – 3 min read
European data is confirming that our “Best of All Possible Worlds” scenario is unfolding there. In the U.S., consumers are transitioning spending from goods to services and are poised to unleash pent-up demand. In Asia, industrial activity continues to come in strong.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • The consumer price index for May is expected to remain elevated amid base effects, recovery in oil, and the reopening. However, we and the Federal Reserve continue to view inflation pressures as transitory.
  • While consumers are expected to be upbeat about current conditions in the preliminary June University of Michigan sentiment index, we will watch for consumer inflation expectations and future buying plans.


  • Markets will watch the ECB meeting closely as the central bank must decide to extend the increased pace of purchases into Q3. We expect it will, while keeping flexibility to act, depending on pressures on European curves.
  • We will watch the 47th G7 Summit, as members discuss a global corporate minimum tax, among other topics. This would be a pivotal step in Biden’s tax agenda in the U.S.

Asia Pacific

  • China consumer and producer prices will be closely monitored given rising input costs. While the historical pass-through from producer to consumer prices has been limited, the May output price PMI sub-index has climbed to the highest level on record, suggesting some costs are being passed on to consumers.
  • The final estimate of Japan 1Q21 GDP could be revised lower, given weak capex data in the latest Ministry of Finance corporate statistics report.

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