The data and events calendar is very heavy this week. In the US, focus will be on a number of key macro data releases, including PCE inflation, ISM PMIs, CB consumer confidence, ADP employment and non-farm labour market data. Moreover, the Federal Reserve holds a policy meeting on Wednesday.
In the Eurozone, preliminary data for Q1 GDP and April CPI-inflation will likely be the headline-grabbers. In the UK, the services PMI release for April (on Friday) may compete with the Bank of England’s policy meeting and inflation report (on Thursday) for the market’s attention. In Switzerland, there are three releases of note – the KOF leading indicator, retail sales and CPI-inflation.
The data and events calendar is reasonably light in Australia and New Zealand and Wednesday is a public holiday in Germany and Switzerland.
Monday 29th April
United Kingdom: Bank of England Governor Carney to speak
United States: Personal income, spending and prices (March). Core PCE price inflation – one of the Fed’s key measures of US inflation – has oscillated in a narrow 1.8-2.0% yoy range since March 2018 and only a significantly higher or lower figure in March is likely to materially alter markets’ expectations that the Federal Reserve will likely keep its policy rate on hold for the foreseeable future.
Tuesday 30th April
New Zealand: ANZ Business Confidence (April)
Switzerland: KOF Leading Indicators (April). This measure of Swiss economic activity has historically correlated closely with Swiss GDP growth. Analysts are forecasting a broadly unchanged 97.5 in April, which would suggest that GDP growth in early Q2 remained soft but was marginally stronger than the paltry +0.2% qoq recorded in Q1. If correct this would likely reinforce SNB Chairperson Jordan’s view that the Swiss policy rate should remain negative for the time being and that the SNB should standby to intervene in the FX market to keep any Swiss Franc appreciation in check.
Eurozone: German labour market data (March)
Eurozone: Q1 2019 GDP, preliminary reading. Analysts forecast that GDP growth in the Eurozone rose only incrementally to +0.3% qoq from +0.2% qoq in Q4 2018. If correct, this is likely to reinforce the ECB’s view that there is currently no rational to hike rates for the foreseeable future.
United Kingdom: Opposition Labour Party emergency National Executive Committee (NEC) meeting. Labour Party leader Jeremy Corbyn has been under growing pressure from major trade unions, Labour MPs and party supporters to formally endorse support for a confirmatory second referendum. However, he has so far held out for a Brexit deal which would include the UK’s membership of a customs union.
United States: Conference Board Consumer Confidence (April). The downturn is US consumer confidence since September has arguably acted as a headwind to retail sales and the broader measure of consumer demand.
Wednesday 1st May
Labour Day: Public holiday in Germany and Switzerland
United Kingdom: Manufacturing PMI (April). This index of economic activity had a large bounce in March to a one-year high of 55.1 but this was partly due to a rise in manufacturing inventories ahead of the 29th March – the UK’s original date to exit the EU. Analysts indeed expect the figure to have returned to a more “normal” level of 53.2 in April.
United States: ADP non-farm employment data (April). This non-official measure of the change in employment in the private sector is an important precursor to the official release of US labour data (for both private and public sectors) on Friday. The ADP measure of private-sector payrolls rose only 129,000 in March but analysts forecast a return to “trend” of 180,000 in April.
United States: ISM Manufacturing PMI (April). US GDP growth in Q1 2019 (3.2% qoq annualised) was stronger than implied by the ISM manufacturing purchasing managers index so markets will want to wait for the release of the non-manufacturing PMI (on Friday) on to get a better picture of how the US economy fared in early Q2.
United States: Federal Reserve policy meeting, statement and press conference. The Fed is unlikely to have materially changed its “wait-and-see” stance regarding its policy rate but markets will be paying close attention to the Fed’s take on the surprisingly strong GDP growth recorded in Q1.
Thursday 2nd May
Switzerland: Retail sales (March). Swiss retail sales contracted 0.3% yoy in January-February – one of the few developed economies to have recorded a negative growth rate over the period.
United Kingdom: Bank of England policy meeting. With the Brexit saga still playing out the Bank of England is very unlikely to even consider hiking or cutting its policy rate – which has been stuck at 0.75% since August. However, the accompanying statement, press conference and updated quarterly inflation report will shed more colour on the Monetary Policy Council’s policy bias at this juncture and its take on the likely pick-up in GDP growth in Q1.
Eurozone: ECB Board member Praet and Bundesbank Weidmann to speak
Friday 3rd May
Australia: Building approvals (March)
Switzerland: CPI-inflation (March).
United Kingdom: Services PMI (April). This index of economic activity for the important service sector (75% of UK GDP) has been on a downward trend since July and unlike the manufacturing PMI fell in March to 48.9. Analysts forecast a partial recovery to 50.4 in April.
Eurozone: CPI-inflation (April, flash estimate). Headline CPI-inflation has been in a narrow 1.4-1.6% yoy range since December and analysts forecast that it rose to the upper end of this range in April. Similarly, core CPI-inflation, which strips out food and fuel prices, has oscillated in a 0.8-1.1% yoy range since last May and the consensus forecast is for 1.0% yoy in April. The bottom line, assuming these forecasts prove broadly correct, is that inflationary pressures in the Eurozone remain very muted and the ECB is likely to stick to is prevailing view that it will keep its policy rates unchanged this year.
United States: Labour market data (April). As often the case the focus will be on the headline non-farm payrolls number – with the analyst forecast of 181,000 slightly below the actual figure of 196,000 in March. But as important will be the other components of the labour market data release, including private sector weekly earnings which have risen at a robust and stable rate of around 3.3% yoy since October.
United States: ISM non-manufacturing PMI (April). This measure of economic activity in the service sector has been pretty choppy but analysts forecast 57.2 in April, broadly in line with the 57.5 average recorded in Q1 2019.
