Week Ahead – May 1st

This week is set to be extremely busy, with a number of key events scheduled. Investors will closely follow the US labor report, as well as the monetary policy decisions of the Federal Reserve and the European Central Bank. Additionally, earnings reports for Pfizer, AMD, Uber, Qualcomm, and Apple, the ISM Services and Manufacturing PMI, job openings, and external trade data in the US will be in focus. Also, central banks in Australia, Brazil, Malaysia, and Norway will decide on interest rates, while inflation rates will be released for the Euro Area, Italy, the Philippines, Switzerland, South Korea, Indonesia, and the Netherlands. Finally, manufacturing PMIs are expected from China, India, Canada, Italy, South Korea, and Russia.

In the US, April jobs report and the Federal Reserve’s interest-rate decision are among the most anticipated news. The US economy is expected to have added 181k positions last month, which is the lowest number since December 2020, and the unemployment rate is likely to have increased to 3.6%. Additionally, the average hourly earnings are forecasted to have grown by 0.3% month-over-month, which is the same as the previous period. The Labor Department will also release March data on job openings, quits, hires, and layoffs. On the monetary front, policymakers are expected to raise rates by a final 25 bps to cool down the economy and bring down high inflation, despite recent GDP data pointing to a sharper-than-expected economic slowdown in the first quarter. This would lift the fed funds rate to a target range of 5.00% to 5.25%, which will push borrowing costs to new highs since 2007. Moreover, the Institute for Supply Management will release April surveys of purchasing managers that will measure economic activity in the US manufacturing and services sector. While factory activity is expected to remain in contraction, the services sector is expected to have expanded further. Furthermore, investors will be watching for earnings reports from major corporations such as Pfizer, AMD, Uber, Qualcomm, and Apple, which will offer further insights into the health of the world’s largest economy. Elsewhere in North America, Canada will release the latest merchandise trade figures, business confidence, and unemployment data.

In Europe, the European Central Bank is expected to raise borrowing costs for a seventh time, with most investors predicting a 25bps hike. The annual inflation rate in the Euro Area is set to slightly accelerate to 7% in April from an over 1-year low of 6.9% in March. In Norway, the Norges Bank is also anticipated to raise its key policy rate by 25bps to 3.25%, the highest rate since late 2008. In Germany, retail sales are likely to recover from a 3-month fall while factory orders are expected to have dropped after three months of growth. Other important data to follow include updated PMIs, Eurozone’s unemployment, retail trade, and producer prices, Germany’s foreign trade, Switzerland’s inflation, unemployment, and consumer confidence. In the United Kingdom, important releases include the final S&P Global PMIs, Nationwide housing prices, and the Bank of England’s monetary indicators.

In Asia, all eyes will be on the China’s PMI figures for April, which will be closely monitored by financial and commodity markets due to growing concerns that the Chinese economy may be slowing down. Meanwhile, Japan is expected to release consumer confidence figures for April, providing insights into the country’s economic health. Also, investors will be eagerly awaiting April’s PMI data for India and South Korea, while GDP growth figures are anticipated for Hong Kong, Taiwan, and Indonesia.

In Australia, the Reserve Bank of Australia is expected to keep its cash rate unchanged at 3.6% for a second consecutive meeting, following a sharp slowdown in Australian inflation in March. Other important data releases from Australia include the trade balance and retail sales figures for March. Meanwhile, New Zealand is set to release a series of labor data for the first quarter.