The earnings season enters its busiest phase in the coming week, with Apple, Facebook, Microsoft, Alphabet and Amazon reporting quarterly results; while central banks in the US and Japan will be deciding on monetary policy. On the economic data front, the US is releasing the first estimate of Q1 GDP, alongside durable goods orders, and personal income and outlays. Other GDP updates to follow include those from the Eurozone, Sweden, Mexico and South Korea. Elsewhere, the bloc’s business survey and inflation will be keenly watched, as well as Japan retail sales, industrial production, China NBS PMI survey, and Australia Q1 inflation data.
Federal Reserve officials are seen holding the target range for the federal funds rate steady at 0-0.25 percent at the end of a two-day meeting on Wednesday, with strong economic data and rising inflation possibly making it difficult for the central bank to defend its pledge to remain accommodative. In March, the Fed signaled a strong likelihood that there may be no rate hikes through 2023, despite revising up its GDP forecasts for 2021 and 2022.
On the economic data front, the advance estimate of GDP will probably show a pick up in economic recovery during the first quarter of the year, helped by continued moves to reopen the economy and an acceleration in the pace of COVID-19 vaccinations. The world’s largest economy is seen growing by an annualized 6.5 percent during the January to March period, following a 4.3 percent expansion seen in the previous three-month period. Other notable publications include: personal income and outlays; PCE price index; durable goods orders; first-quarter employment cost index; CB consumer confidence; pending home sales; Dallas Fed Manufacturing Index; Case-Shiller home prices; Chicago PMI; the advance estimates of goods trade balance and wholesale inventories; and the final reading of Michigan consumer sentiment.
Traders also prepare for the busiest week of earnings season, with focus turning to reports from big firms including Apple, Alphabet, Amazon, Microsoft, Facebook, Tesla, Twitter, Alibaba, CME Group, 3M, Caterpillar, Qualcomm, Spotify, Gilead Sciences, Merck & Co, Mastercard, Visa, McDonald’s, Starbucks, General Electric, Ford Motor, Boeing, Exxon Mobil and Chevron.
Elsewhere in America, important data to follow include Canada monthly GDP, retail sales and the final reading of producer prices; Mexico first-quarter GDP, trade balance and economic activity; and Brazil jobless rate and current account.
Across the Atlantic, the Eurozone’s largest economies, including Germany, France, Italy and Spain, will be publishing their preliminary estimates of first-quarter GDP, inflation rates and jobless data. Forecasts suggest that the bloc entered a double-dip recession in the first quarter, as COVID-19 lockdowns continued to hammer the services industry. Other important data include Germany and Italy business and consumer morale; UK car production, CBI distributive trades and Nationwide house prices; France consumer sentiment; Spain retail sales; Sweden first-quarter GDP; Switzerland and Turkey business confidence and foreign trade.
In Asia, the Bank of Japan is expected to keep its policy interest rate at -0.1 percent when it holds a meeting on April 26-27. Key economic data include retail sales, industrial production, consumer confidence, jobless rate and housing starts. In China, data to watch for include the NBS PMI survey and industrial profits; while in South Korea, first-quarter GDP, business and consumer morale will be in the spotlight.
Elsewhere, investors will turn their attention to Australia’s first-quarter consumer price inflation, producer and foreign trade prices; and New Zealand’s trade balance.