Easter Monday yesterday meant a short week in nearly many markets around the world while in Australia and NZ the week will be shortened even further by the observance of Anzac Day on Thursday.
So economic data and corporate results will be few in number here and across the Tasman – the March quarter Consumer Price Index is the major event for markets here this week.
The CPI is forecast to have risen by 1.7% in the three months to March with core inflation around the same figure.
Offshore its corporate results in the US and Europe (especially big European bank earnings for the three months to March).
Central banks have monetary policy meetings in Japan, Sweden, Indonesia, Turkey, Canada, Ukraine, and Russia.
The major data release for the US is the first estimate of March quarter GDP which will be out Friday night, our time.
Early low estimates under an annual rate of 2% have risen now to a market consensus of 2.4%. GDP rose 2.2% in the final three months of 2018.
The health of the US home building industry is starting to cause concerns – new home starts are around two-year lows even though interest rates have eased in the wake of the US Federal reserve moving to a sit and watch stance.
This will be tested by new homes sales data for March. There are also a couple of regional Fed surveys for Richmond and Kansas.
Talks between the Trump Administration and China are due to resume this week on a new trade deal with more reports of a possible summit between Trump and President Xi.
As well as the GDP data, US durable goods orders for March will be watched closely to see if there are any more signs of weakening activity among manufacturers (as the composite survey on manufacturing and services activity for April last month suggested).
Perhaps the key release will be the Personal Consumption Expenditure prices and spending data that is the preferred inflation measure for the Fed. PCE inflation continues to run at around 1.8% which is less than the Fed’s 2% target figure.
If that is the case the Fed won’t move on rates next time it meets on April 30-May 1.
About 150 S&P 500 companies are due to report March quarter earnings this week – it started on Monday with around a dozen releasing figures (See separate report).
In Japan, industrial production figures and retail sales figures are due for release on Friday but will be preceded by the latest Bank of Japan monetary policy meeting on Thursday.
There could be a downgrading in forecasts as the Japanese economy has weakened in the past couple of months.
That’s why the central bank and the Japanese government are getting increasingly nervous about the planned increase in the country’s sales tax in October. The last increase several years ago pushed the economy into recession.
South Korea’s first quarter GDP figure will be released later in the week – estimates are for an annual growth rate around 2.3%, down from 3.2% in the final three months of 2018.
It’s quiet in Europe – the central banks of Sweden and Russia are down to meet, there are some important financial results from six of Europe’s biggest banks – including UBS, BNP-Paribas, and Barclays.
Things on the Brexit front are quiet, but Prime Minister Theresa May is under increasing pressure from her Conservative Party to quit as promised – sooner than later.
The major event in Europe is the Spanish elections next Sunday. Watch for an inconclusive result.
