UPCOMING EVENTS:
- Monday: China
Caixin Services PMI, Eurozone PPI, Canada Services PMI, US ISM Services
PMI. - Tuesday: Japan
Wage data, RBA Policy Decision, Eurozone Retail Sales, New Zealand Jobs
data. - Wednesday:
Switzerland Unemployment Rate. - Thursday: China
Inflation data, US Jobless Claims. - Friday: US
Annual CPI revision, Canada Jobs data.
Monday
The US ISM Services PMI is expected at
52.0 vs. 50.6 prior. The latest S&P
Global Services PMI improved notably with
generally positive comments especially on the inflation part. The last
ISM report missed expectations
across the board and the employment component plunged to levels last seen
only in the last three recessions. It will be interesting to see if the
last dip was just a blip or something is brewing under the hood.
US ISM Services PMI
Tuesday
The Japanese Average Cash Earnings Y/Y
will be a data point to watch given the BoJ’s sole focus on wage growth.
The last
month the data disappointed meaningfully
showing a drop to 0.2% vs. 1.5% prior. The attention remains on the spring
wage negotiations and the easing in
inflation might help to bring real wages into positive territory.
Japan Average Cash Earnings YoY
The RBA is expected to keep the Cash Rate
unchanged at 4.35% with possibly some changes to the statement where they
could drop the tightening bias following an ugly labour
market report and a broad fall in inflation
rates across all measures.
The market was expecting the first rate cut in August, but that was brought
forward to June after the recent data releases.
RBA
The New Zealand Employment is expected to
show a 0.3% rise in Q4 vs. a drop of -0.2% in Q3 and the unemployment rate to
increase to 4.3% vs. 3.9% prior.
The labour costs are seen lower with the Q/Q measure expected at 0.8% vs. 0.9%
prior and the Y/Y one at 3.7% vs. 4.1% prior. The market expects the RBNZ to
cut rates in May and if the data comes out as expected or even worse, then that
would become a real possibility.
New Zealand Unemployment Rate
Thursday
The Chinese CPI Y/Y is expected at -0.5%
vs. -0.3% prior,
while the M/M measure is seen at 0.4% vs. 0.1% prior. There is no consensus for
the Core CPI Y/Y although the prior figure showed a 0.6% rise, which was the
same as for the previous two months. There are still deflationary forces in
China and the falling stock market doesn’t help either. The PBoC recently
cut the RRR
by 50 bps, which was more than
expected, but it looks like the market wants to see more.
China CPI YoY
The US Jobless Claims continue to be one
of the most important releases every week as it’s a timelier indicator on the
state of the labour market. Initial Claims keep on hovering around cycle
lows although they’ve been rising in the last two weeks, while Continuing
Claims started to trend higher again, and they are now close to the cycle high.
This week the consensus sees Initial Claims at 220K vs. 224K prior,
while there’s no consensus for Continuing Claims although the prior release saw
an increase to 1898K vs. 1828K prior.
US Jobless Claims
Friday
The Canadian labour market report is
expected to show 15K jobs added in January vs. 0.1K in December
and the Unemployment Rate to tick higher to 5.9% vs. 5.8% prior. The BoC
places a lot of focus on underlying inflation measures and wage growth, so
the Average Hourly Wages Y/Y will be a key indicator to watch as the prior
release saw a spike to 5.7%, which was the highest since January 2021.
Canada Unemployment Rate