A number of central bank officials in the US, Eurozone, UK, Australia and New Zealand are due to speak this week but it is not obvious that they can or will say anything which could materially change markets’ perception of monetary policy in these economies. The RBNZ holds its policy meeting mid-week and will in all likelihood once again leave rates unchanged. Inflation readings in the Eurozone (for March) and the US (January) are likely to reinforce the broad perception, within central banks and markets, that there is little compelling reason to hike rates at this juncture.
The US and UK will also release second readings of Q4 GDP while in Switzerland the key release is the KOF leading indicator for March (out Friday). The data calendars are pretty light in Australia and New Zealand.
Monday 25th March
Germany: IFO business climate index (March). This index of economic activity in the Eurozone’s largest economy has fallen every month since August from 103.8 to 98.5 in February. The consensus forecast is that the index steadied in March but even so this would still point to very weak GDP growth in Q1 2019, following zero growth in Q4 2018.
Eurozone: ECB board member Coeure to speak
United States: FOMC member Harker to speak. The Federal Reserve at its policy meeting last week made it very clear that it sees no reason at present to hike (or cut) its policy rate, with the US central bank seemingly in an entrenched wait-and-see position.
Australia: Reserve Bank of Australia Assist Governor Ellis to speak.
New Zealand: Trade balance (February). The trade deficit has rapidly increased from NZD 3.6bn in May 2018 to NZD 6.4bn in January which at the margin has likely acted as headwind to the Kiwi Dollar.
Tuesday 26th March
United States: FOMC members Rosengren, Evans and Daily to speak.
United Kingdom: Bank of England MPC member Broadbent to speak. The Monetary Policy Council’s scope to even tweak interest rates is clearly being hampered by Brexit-related uncertainties and its impact on Sterling has become very limited.
United States: Building permits and housing starts (February).
Australia: Reserve Bank of Australia Assist Governor Kent to speak.
New Zealand: Reserve Bank of New Zealand policy meeting. The overwhelming consensus forecast is that the RBNZ will leave its policy rate unchanged at 1.75% with markets focussing on the central bank’s bias.
Wednesday 27th March
Eurozone: ECB board members and President Draghi to speak.
United States: Trade balance on goods and services (January). The US trade deficit hit an all-time high of $59.8bn in December which would have made uncomfortable reading for President Trump.
United States: FOMC member George to speak.
Thursday 28th March
United States: FOMC members Quarles, Clarida, Bowman, Williams and Bullard to speak.
United States: Q4 GDP (second reading). US GDP growth slowed from 3.4% qoq in Q3 to 2.6% qoq annualised in Q4 2018 according to the first reading. Analysts expect the second reading to show a modest downward revision to 2.4% qoq which if correct could at the margin weigh on the Dollar. However, the more pressing issue is how much more US growth weakened in Q1 2019, with some estimates pointing to only 1% growth.
United States: Pending home sales (February).
New Zealand: Reserve Bank of New Zealand Governor Orr to speak
Friday 29th March
Australia: Private sector credit sales (February)
Switzerland: KOF leading indicator (March). This indicator of Swiss economy activity has historically correlated closely with GDP growth. It fell throughout 2018 and hit a multi-year low 92.4 in February 2019. The consensus forecast is that it rose to 93.6 in March but even if this is the case this would suggest that GDP growth did not pick up much in Q1 2019 (or even weakened) from 0.2% qoq in Q4 2018.
Germany: Labour market data (March)
United States: Q4 GDP (second reading). GDP growth was a lacklustre 0.2% qoq in Q4 (in line with EU growth) and analyst do not foresee any major revisions to the first reading.
Eurozone: CPI-inflation (March, preliminary reading). The consensus forecast is that both headline and core CPI-inflation remained unchanged at 1.5% yoy and 1.0% yoy, respectively, in March. Weak inflation and growth underpinned the ECB’s recent announcement that it did not envisage any rate hikes this year.
United States: FOMC members Quarles, Williams and Quarles to speak.
United States: Personal income and spending (February) and prices (January). The PCE measure of core inflation, which the Federal Reserve tracks closely, has hovered in a tight 1.8-2.0% yoy range since April and analysts do not expect it to have broken out of this range in January.
