Week Ahead

The US, China and India will be publishing inflation updates for April in the coming week, while first-quarter GDP releases from the UK, Malaysia, and the Philippines and factory production numbers from the US, Eurozone and India will also be keenly watched.

Other important data to follow include US retail sales and consumer confidence, Japan current account and Australia business morale. The ECB will be publishing its monetary policy meeting minutes, while central banks in Mexico and the Philippines will be deciding on interest rates.

It is a relatively busy week ahead in the US on the economic data front. The consumer price report for April will probably show consumer price inflation rate jumping to 3.6 percent, its highest since September 2011 and well above the Federal Reserve’s target of about 2 percent. At the same time, the preliminary estimate of Michigan consumer sentiment for May will likely show an improvement in morale to the strongest level since February 2020. Elsewhere, retail sales and industrial production numbers for April are seen pointing to solid increases in both domestic trade and factory activity. Other publications to watch for are producer and foreign trade prices, business inventories, JOLTs job openings, and the government’s monthly budget statement.

Elsewhere in America, important data to follow include Canada final estimates of manufacturing and wholesale sales; Mexico industrial output and gross fixed investment; Brazil inflation rate and business morale; Argentina consumer prices; and Peru monthly GDP and unemployment rate. Central banks in Mexico, Chile and Peru will be deciding on interest rates.

Across the Atlantic, the UK will be publishing preliminary estimates of first-quarter GDP data, alongside monthly industrial production, construction output, trade balance and Halifax house prices. Britain’s GDP is seen contracting in the January to March period as most of the country was in national lockdown due to a new wave of coronavirus infections. Still, forecasts suggest the economic recovery gained momentum in March as people in the UK saw restrictions started to lift.

Elsewhere in Europe, investors will be waiting for the ECB monetary policy meeting accounts. In April, policymakers took a wait-and-see approach after March’s decision to conduct emergency bond purchases at a significantly higher pace over the April-June period. Interest rates were kept at record-low levels and the PEPP quota was maintained at €1.85 trillion with the buys to run at least until March 2022. On the economic data front, the Eurozone industrial activity will be eagerly awaited, as well as Germany ZEW Economic Sentiment Index. Investor sentiment in Europe’s largest economy likely improved in May after a setback in the previous month. Other important releases include: France first-quarter unemployment rate; the Netherlands, Ireland and Sweden consumer prices; Italy industrial output; Norway and Poland first-quarter GDP growth; and Turkey current account, unemployment rate and industrial activity.

In the Asia-Pacific region, China will be publishing inflation data for April, with markets pointing to the fastest increase in consumer prices in seven months and the sharpest advance in producer prices since October 2017. Meanwhile, Japan is releasing data on household spending, current account and Eco Watchers Survey Outlook. In Australia, investors will turn their attention to NAB business confidence, as well as the final readings of both retail sales and building permits.

Other highlights include: India consumer and wholesale prices, and industrial production; the Philippines and Malaysia first-quarter GDP; South Korea jobless rate; and New Zealand food inflation. The Philippine central bank is seen keeping interest rates at record-low levels when it meets on Thursday.

Categories: Markten