Monthly Archives: August 2019

Examining the relationship between PMI data and changes in GDP

Close relationships between PMI and GDP data can be exploited to provide advance estimated growth ratesPMI 50.0 no-change does not always translate to neutral GDP outcomeEvidence suggests 50.0 no-change marks and GDP growth rates are inversely linked to country’s level of economic development IHS Markit’s PMI survey diffusion indices are designed to capture business cycle developments. They do this by ...

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Sub-Saharan region emerges as bright spark in troubled global economy

Output growth remains strong despite global slowdown Country PMIs reveal shifting developments Africa trade agreement bolsters hopeful outlook The first half of 2019 looks to have been a disappointing one in terms of global growth. Deteriorating sentiment among industrial sectors, as well as subdued service sector activity, means that global economic growth has slowed to a three-year low. However, encouraging ...

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Why eurozone stubborn low inflation rate is a cause for concern

Ignoring the usual spring volatility, underlying inflation in the eurozone has remained stuck at around 1%, confounding the ECB’s long-standing expectation of a pick-up. Growth rates in compensation and unit labour costs have accelerated but this has led to compressed profit margins rather than higher core inflation rates. With an eye on Japan’s experience, the ECB has been aiming to ...

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Southeast Asia/far east jackup rig market update

State of the market The newbuild supply overhang in Asia-Pacific continued to ease over the month of May. Shelf Drilling firmed up a three-year contract for one of the two newbuilds it acquired earlier this year from China Merchants Heavy Industry (CMHI) shipyard, Shelf Drilling Achiever, which will see the unit mobilise imminently to the Middle East for the job. ...

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Bank of Korea cuts policy rate in July amid growing external risks

The Bank of Korea lowers the Base Rate from 1.75% to 1.50% US-China trade dispute and Japan’s export restrictions impacted Korean exports Weaker growth momentum and mild inflation, as indicated by PMI surveys, support case for monetary easing The Monetary Policy Board of the Bank of Korea (BOK) voted to cut interest rates by 25 basis points at the July ...

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Hydrogen as an Energy Carrier: Can China accelerate the path down the learning curve?

On 18 July 2019, IHS Markit held the first workshop for the “Hydrogen the Enabler: Meeting China’s Energy Challenge?” multi-client study. The workshop focuses on the current hydrogen market development in China, current and future production costs of hydrogen from gasification, reforming, electrolysis, and pyrolysis, and different options of hydrogen transportation such as pipelines, compressed tube trailers, or cryogenic trucks. ...

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US manufacturing flirts with recession despite output rising in June

Manufacturing output rises in June but falls over second quarter as a whole Second successive quarterly drop in production matches the signal from PMI surveys Survey data suggest weak order book growth could limit manufacturing growth in third quarter US manufacturing output rose 0.4% in June, its biggest monthly gain since December, but the rise failed to prevent the sector ...

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The Vaca Muerta Play: Gaining competitive economics through operational efficiencies

Argentina’s Vaca Muerta formation is viewed as Latin America’s most promising area for the development of unconventional oil and gas resources. An analog often quoted for the Vaca Muerta is the prolific Eagle Ford formation in the United States of America (USA). The Vaca Muerta formation has seen clear benefits from the lessons learned up north in the USA. Active ...

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Week Ahead Economic Preview: Week of 22 July 2019

Flash PMI surveys for the US, Eurozone, Japan and Australia US second quarter GDP and earnings season ECB policy meeting Brexit in spotlight with new UK Prime Minister Special reports on EU convergence and Japan-South Korea trade tensions Second quarter US GDP numbers are expected to add to signs that economic growth has slowed sharply for many economies after a ...

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