Week Ahead

The Federal Reserve and RBA will be releasing policy meeting minutes in the coming week, while central banks in China and South Africa meet to set interest rates. On the economic data front, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will give an insight about the state of the global economy. Other important releases to follow include US building permits and housing starts; Canada and UK inflation data and retail trade; Japan, Thailand and Eurozone Q1 GDP updates; China industrial production; and Australia employment figures.

In the US, the minutes from the last FOMC meeting are due Wednesday, with investors hoping they might provide some clarity on policymakers’ next moves. In April, the Federal Reserve left monetary policy unchanged, despite acknowledging a "temporary" rise in inflation and an improvement in the economic outlook. The Markit PMI survey for May will likely show the manufacturing sector expansion was little-changed from April’s record high and service activity growth eased, but remained strong overall as the country continued its reopening efforts. Other notable publications include building permits and housing starts, existing home sales, homebuilder sentiment, NY Empire State Manufacturing Index, Philadelphia Fed Manufacturing Index, and overall net capital flows.

Elsewhere in America, important data to follow include Canada inflation rate, retail trade, housing data, and ADP employment change; Mexico retail sales; and Chile first-quarter GDP.

Across the Atlantic, the UK economic calendar is chock-full of important data, especially the first-quarter jobs report, and key updates on Markit PMIs, inflation numbers, retail sales, consumer confidence, and factory orders. Figures from the ONS are expected to show the unemployment rate held steady at 4.9% in the three months to March, supported by the government’s furlough scheme and as the country started to reopen from coronavirus-induced restrictions. Meantime, the consumer price index is set to increase by the most in 13 months.

Elsewhere in Europe, the coming week will see the publication of the second estimate of the Eurozone first-quarter GDP and a first look at both the May PMIs and consumer morale for the region. Preliminary estimates from the Eurostat showed the bloc entered a double-dip recession in the January-March period, as COVID-19 lockdowns continued to hammer activity and demand. Meanwhile, Markit PMI data are likely to point to a further improvement in the Eurozone private sector economy, as gains in the service sector due to more relaxation of Covid-19 restrictions are seen outpacing softer factory activity growth. Other important data to follow include: Eurozone and Turkey consumer morale; Germany producer prices; Russia and the Netherlands first-quarter GDP data; and Switzerland industrial production.

Meanwhile, it will be a busy week in Japan with the release of the preliminary reading of first-quarter GDP, trade balance, inflation rate, machinery orders, Jibun Bank Markit PMIs, and March’s final reading of industrial production. The world’s third-largest economy is seen contracting in January-March, due to a resurgence in COVID-19 cases and new restrictive measures. Also, China’s industrial production, retail sales, unemployment rate, fixed asset investment and house prices for April will be keenly watched, while the People’s Bank of China will provide an update on its new loan prime rate (LPR) on Thursday.

The Reserve Bank of Australia will be publishing the minutes from its latest monetary policy meeting. On the economic data front, important releases in Australia include employment figures, Markit PMIs, Westpac consumer sentiment, and the preliminary reading of April’s retail sales.

Other key data include Thailand and Israel first-quarter GDP numbers, Indonesia trade balance, Hong Kong unemployment rate and inflation, and South Africa interest rate decision, inflation and retail sales.



Categories: Markten