Insights
Market Review - May 2020
May Overview
A number of European countries began to tentatively open up their economies in May. Composite Purchasing Managers’ Index (PMI) flash figure for May indicated an increase to 30.5 (from 13.6 in April), which is the same level as in March and significantly above the level expected by the market. Inflation continued to fall, dropping to 0.3% in April, from 0.7% in March and early flash estimates point to a further fall to 0.1% in May. However, the main focus in the region this month was the announcement by the European Commission of a ‘Next Generation’ €750bn aid package. This will involve grants of €500bn distributed to hardest hit EU members, with €250bn available as loans. Part of this will be to support transition to a greener and more digital economy. This will provide financing to those countries with already high levels of debt, without the need to go to external market to raise funds.
