Week Ahead

Next week will be the busiest of the corporate earnings season, with megacaps and big techs reporting. In the US, investors will be watching the preliminary estimate for first-quarter GDP growth, PCE expenditure price index and several housing updates. The war in Ukraine also will not leave headlines after Russia officially declared its intent to control Donbas and southern Ukraine and UN chief is set to meet President Putin.

It will be a very busy week in the US, as the earnings season continues with megacaps and big techs set to report including Apple, Microsoft, Amazon, Alphabet, Meta, Visa, Chevron, Exxon Mobil, Coca-Cola, Pepsico, Boeing, Twitter. On the data front, preliminary estimate for first-quarter GDP growth will be published. The US economy likely expanded an annualized 1.1%, the least since the contraction in 2020, as rising inflation, borrowing costs and the impact of the Ukraine war weigh, despite easing coronavirus restrictions. At the same time, data will likely show personal spending picked up last month while core PCE inflation eased to 5.3% from 5.4%. Other important economic releases nclude: durable goods orders, Case-Shiller and FHFA house prices, new and pending home sales, CB consumer confidence, goods trade balance. Elsewhere in America, Canada monthly GDP and raw materials prices; Mexico GDP growth figures, unemployment rate, retail sales and trade balance; and Brazil mid-month CPI and producer prices will also be in the spotlight.

In Europe, the largest economies including Germany, France, Italy and Spain, will be publishing their preliminary estimates of first-quarter GDP and inflation rates. Forecasts suggest the bloc continued to recover in the first quarter but the outlook for the rest of 2022 remains clouded by significant uncertainties regarding the outcome of the war in Ukraine, the impacts of economic sanctions on Russia and runaway inflation. Consumer prices are expected to surge by 7.4% in April, remaining at a record level. Other important data include Euro Area business survey and construction output; Germany Ifo business climate, Gfk consumer confidence and producer prices; Switzerland KOF leading indicators, foreign trade and retail sales; and Turkey business confidence and external trade. Also, the central banks in Hungary, Russia and Sweden will be deciding on monetary policy. In the United Kingdom, the CBI is set to publish gauges for factory orders, distributive trades and business optimism while the ONS will release updated data for March’s public finances. European markets will also react to Sunday’s run-off of French presidential elections between incumbent Emmanuel Macron and far-right challenger Marine Le Pen, with the latest polls showing Macron winning with 55% of the votes.

In China, earnings take center stage with results coming from major oil companies Sinopec and PetroChina, and financials China Life Insurance and Bank of China, while in Hong Kong, the focus will be on financial market operator Hong Kong Exchanges and Clearing Ltd and the world leading pork company WH Group. On the economic side, April manufacturing PMI readings, both the official and the Caixin survey, will offer insights on how factories are being affected by the stringent “Zero Covid” policies amid China’s worst virus wave yet.

In Australia highly anticipated, first-quarter inflation data is expected to show consumer prices rose 4.6% in Q1, the most since Q3 2008 and the Reserve Bank of Australia, which has been slowly backtracking on its dovish stance, could shift to a much more hawkish tone.

In Japan, key labor market, industrial production, and retail data will be released before the Bank of Japan meets to decide on interest rates. The BoJ is widely expected to leave its interest rate unchanged at a record low of -0.1%, although the focus of the meeting should be on how the BoJ will approach the yen weakness and 10-year JGB yields rising above target. Other key data include South Korea’s Q1 GDP growth rate, as well as consumer and business confidence, whilst Singapore releases inflation and unemployment data, and Taiwan publishes manufacturing output figures.