Australian monetary policy will dominate local markets, at least for the start of the coming week with the Reserve Bank holding its April meeting tomorrow.
Globally, the invasion of Ukraine, Covid in China, fears about the health of the US economy (despite solid jobs data for March) and higher interest rates, will continue to rock market confidence.
Then there are the monthly surveys of service sector activity for March across the world’s major economies this week – one of China’s surveys last week showed a sharp contraction.
Next Sunday sees the first round of French presidential parliamentary (and local) government elections.
For the RBA meeting, no change is expected, meaning no change in interest rates with the cash rate to remain steady at 0.1%.
March quarter inflation data later this month will show a headline rate above 4% (currently 3.5%) and more pressure on the central bank.
The Federal Budget for the 2022-2023 financial year, announced last Tuesday, will provide temporary stimulus for many Australian households this year.
Economists at Moody’s think the RBA will not increase the cash rate until August, other economists think it could come as early as June.
There’s also some key data from the Australian Bureau of Statistics (ABS) – the trade data for February which us expected to hit an all-time high close to $14 to $15 billion.
Final retail trade data for February will be released, as well as weekly figures on jobs and pay (all from the ABS).
In the US, the minutes of the Fed’s March meeting will be released and will give a timely way of seeing the extent of the debate not about the rate rise, but about its size.
One member of the Open Market committee wanted to lift rates by 0.50% instead of the 0.25% rise that eventually emerged from the meeting.
There are also a handful of Fed speakers, including Governor Lael Brainard, who speaks Tuesday.
Three weeks on that is now almost a gospel belief in financial markets about the size of the next rate rise in May (May 3-4).
Besides the Fed minutes there’s the February data on factory orders, trade deficit and some early quarterly results from the likes of Levi Strauss, Eli Lilly and Conagra.
In Europe there’s the final estimates of fourth-quarter GDP growth for Germany and France. The final euro zone CPI figures for January are out as well.
In Asia, the Reserve Bank of India (RBI) meets this week with only the latter expected to raise rates in April. This follows rising inflation in India with consumer prices crossing the central bank’s upper tolerance of 6% at the start of 2022.
There are also inflation readings from South Korea and Thailand.
