Next week May 13-17:
He sat down: Chinese inflation (April)
Monday: Eurogroup meeting, New Zealand inflation expectations (Q2)
Tuesday: OPEC monthly report, German final CPI (April), UK jobs report (April/March), German ZEW survey (May), US PPI (April)
married: People's Bank of China (PBoC) Multilateral, Riksbank Minutes, IEA OMR, Australian Wage Price Index (Q1), Swedish CPIF (April), EZ Flash GDP/Employment (Q1) and Industrial Production (March), US CPI (April) / Retail Sales (April)
Thursday: Japanese GDP (Q1), Australian Jobs Report (April), Norwegian GDP (Q1/March), US Philadelphia Fed
Friday: Chinese Retail Sales (April), Eurozone Final CPI (April)
Note: Previews are listed in order of the day
Chinese inflation (Saturday):
Chinese inflation data will be released over the weekend while markets are closed. The CPI on an annual basis is expected to remain at 0.1% in April, while the PPI on an annual basis is expected to record -2.3% versus -2.8% in March. Domestic demand problems emerged from last month's release, as the CPI missed expectations for March and has cooled significantly since February, while the manufacturing sector remains in contraction, recording 18 straight months of declines – with the previous month's metrics sparking… Some speculation of more government support to support the economy. Economy. Using Caixin PMI's commentary as a proxy for the upcoming release, he suggested that “improving market demand has led to a sustained increase in supply. Business activity and total new orders grew for the 16th consecutive month, with the latter increasing at the fastest pace since May last year, indicating a strong recovery.” In demand… Prices rose modestly. Input costs and prices charged by service providers rose, albeit slightly. Input costs rose due to increased prices for raw materials, labor and energy, which were partly passed on to consumers.
New Zealand inflation expectations for the second quarter (Monday):
The Reserve Bank of New Zealand's quarterly outlook survey will be released on the 13th. The previous quarter's release saw business leaders and professional forecasters continue to see inflation ease, with the one-year rate falling to 3.22% from 3.60% in the previous quarter's release, and the two-year measure falling to 2.50% from 2.76%. ANZ suggested at the time that the RBNZ may have been hoping for inflation expectations for next year to fall further, while Westpac said the RBNZ would be relieved to see inflation heading lower and closer to the central bank's target. At the RBNZ's last meeting on April 10, the OCR was maintained at 5.50% which was unanimously expected, while maintaining its hawkish tone as it stated that a restrictive monetary policy stance remains necessary to further reduce capacity and inflation pressures with the Committee. It is confident that keeping the OCR rate at a restricted level for an extended period will return consumer price inflation to the target range of 1%-3% this calendar year.
UK jobs report (Tuesday):
The unemployment rate in the 3 months to March is expected to rise to 4.3%, while headline wages in the 3 months to March are expected to fall year-on-year to 5.5% from 5.6%, and the previous bonus figure is expected to fall. To 5.9% from 6.0%. As a reminder, the previous report saw the unemployment rate unexpectedly jump to 4.2% from 3.9% (albeit subject to the usual data reliability issues), employment falling by 156,000, while “regular wages, which exclude volatile one-time bonuses” payments, “Up 12% month-on-month,” ING saw. This time, analysts at Pantheon expect the data to reflect “further easing of labor market tightness but another strong increase in wages.” More specifically, the consultancy expects “March PAYE data will be revised, and we are looking at a 20,000 monthly increase in employment in April.” On the wages front, the Prime Minister wrote, “We expect another strong month as business responses to minimum wage hikes begin to feed into the data.” From a policy perspective, as traders try to adjust bets on a potential cut in June, the focus will be on wage growth, and whether any potential cooling will give policymakers the green light to ease policy. Currently, the June devaluation is almost enough to flip the currency by as much as 48%.
People's Bank of China Multilateral Fund (Wednesday):
The People's Bank of China (PBoC) is likely to keep the one-year multilateral interest rate at the current level of 2.50%. As a reminder, the central bank refrained from making any adjustments to the one-year MLF interest rate last month and chose to drain money again as it made CNY100 billion in one-year MLF loans against CNY170 billion outstanding while also maintaining On a standard loan. Initial interest rates with 1-year and 5-year LPR were maintained at 3.45% and 3.95%, respectively. The central bank's actions since then have continued to indicate there is no urgent need for adjustments in short-term financing rates, with daily open market operations mostly maintained at modest amounts of CNY2 billion, barring a major injection ahead of the recent Golden Labor Day. weekend which the central bank has since allowed to drain from the system. Recent data releases also suggest there is no urgent need for policy adjustment as trade data showed improvements across the board and the latest China PMI data is a mixed print with the official NBS and Caixin Manufacturing PMIs beating expectations but the non-manufacturing PMI disappointing though. From continuing to expand the territory. However, policy easing cannot be ruled out in the future, with People's Bank of China Deputy Governor Zhou Hexin previously noting that there is still room to move forward on monetary policy, and that they will closely monitor policy effectiveness, economic recovery, and achieving targets, as well as… Good benefit. Back-up tools at the right time.
US Consumer Price Index (Wednesday):
Headline CPI is expected to rise +0.3% m/m in April (previously 0.4%), while core inflation is expected to rise +0.3% m/m, down from +0.4% previously. However, the recent rise in inflation was not enough to worry Fed Chair Powell, who ruled out the possibility of raising interest rates in his post-meeting news conference in May. Instead, Powell suggested that the committee could keep interest rates at current levels longer to reduce inflation. Powell said that as the Fed gets more confident about inflation, interest rate cuts will be in range, but he does not currently have much confidence either way about whether there will be rate cuts this year. This sentiment was echoed by other officials, that although progress has been made on inflation, there will likely be setbacks, and the central bank still has work to do to bring down prices. Analysts at ING said the CPI's +0.3% rise in April is still too high for the Fed to start cutting interest rates this summer, and such a reading would reinforce the Fed's view of keeping rates high for longer. Financial markets are currently pricing in interest rate cuts of about 45 basis points this year (which implies one cut is fully priced in, with about an 80% chance of another cut), and the markets see this cut as likely to come in September or November. the second.
US Retail Sales (Wednesday):
Core retail sales are expected to rise +0.4% m/m in April (previously +0.7%), while the core rate is expected to rise +0.2% m/m (previously 1.1%). Bank of America's Consumer Checkpoint data for the month pointed to continued consumer spending and wage momentum, especially for lower-income groups, but warned that property insurance costs pose risks. The bank's data showed that total card spending per household was +1.0% y/y in April (vs. 0.3% y/y in March), and said that although “recent data has been noisy due to early Easter, leap year and other factors.” Seasonally, “spending momentum appears to remain relatively weak but stable.” Low-income households’ spending growth levels were higher than those of high-income households, low-income households’ after-tax wages rose, and savings reserves remained intact The report said that the apparent slowdown in the labor market calls for careful monitoring. “Tax refunds have been skewed toward lower-income groups. “But while they appear to have spent some of that on retail, we see signs that they have increased debt payments, which could dampen some of the tax refund increases in spending.” She added that higher property insurance costs have been a significant headwind for consumers and that Some of the reasons why insurance payouts are likely to continue are high.
Japanese GDP (Thursday):
GDP for the first quarter of the year is expected to contract by 0.4% versus a previous increase of 0.1% with a quarterly annual reading at -1.5% versus previously. 0.4%. Although a technical recession was avoided with the fourth quarter review, the fundamental data presented a mixed picture. Modest growth in the fourth quarter was supported by strong exports and non-residential investment, with exports up 2.6% primarily due to a significant increase in services exports linked to one-time royalty income. However, private consumption continued to decline, contracting by 0.3% in the fourth quarter, marking the third consecutive quarter of contraction. Bank of Japan Governor Ueda said on May 8 that the Japanese economy is recovering moderately albeit with some weakness, and the central bank will guide policy appropriately from the perspective of achieving the target rate stably and sustainably. At the last meeting of the Bank of Japan, the outlook report showed that the average fiscal forecast for 2024 was reduced to 0.8% from 1.2%, the average fiscal forecast for 2025 was maintained at 1.0%, and the average fiscal forecast for 2026 was maintained at 1.0. %.
Australian jobs report (Thursday):
Expectations are that employment in April will expand by 20K versus the 6.6K contraction seen in the previous report, while the unemployment rate is expected to rise to 3.9% from 3.8%. Last month saw Australia lose 6.6k jobs – despite adding 27.9k full-time jobs and cutting 34.5k part-time jobs, with the unemployment rate rising to 3.8% from 3.7%, and the participation rate falling by one point to 66.6%. Both the Reserve Bank of Australia and the Australian Treasury expect the unemployment rate to rise modestly as the impact of a 13-fold hike in interest rates dampens demand in the economy. Analysts at ABS suggested, at the time, that “the labor market remained relatively tight in March, with the employment-to-population ratio and participation rate still close to their record highs in November 2023… while each has fallen by 0.4 percentage points since then.” now”. After that, they remain well above pre-pandemic levels. In the RBA's latest announcement and forecast, the governing body focused more on inflation versus the labor market, while forecasts showed unemployment rates at 4.2% in December 2024, 4.3% in December 2025, and 4.3% in June 2026. The Reserve Bank of Australia said conditions in the labor market had softened over the past year, but remained tighter than was consistent with sustainable full employment and inflation at target.
China Retail Sales/Industrial Production (Friday):
Retail sales are expected to rise year-on-year to 3.8% from 3.1%, investment in fixed assets is expected to rise to 4.6% from 4.5%, while industrial production is currently no forecast after recording 4.5% last month. In mid-April, markets witnessed the joint release of China's GDP and activity data, which beat expectations in the first quarter – driven by fixed asset investment. Meanwhile, industrial activity declined in March but was stronger than expected at the start of the year. However, industrial capacity utilization in the first quarter fell to the lowest level since 2020. “One area of concern is the sharp decline in capacity utilization in the automotive industry,” ING said. Retail sales in March fell to 3.1% from 4.7%, while online retail sales outperformed – “The rollout of trade policies is likely to support residential appliance sales and auto sales in the coming quarters,” ING assumed. Using Caixin PMI data as alternative indicators, the manufacturing statement noted that “Chinese manufacturers raised their production levels at the fastest pace since May 2023, although this continues to lead to an additional buildup in backlogs.” The sub-sector data revealed that the investment goods sector recorded The fastest growth was across measures of new orders, production and backlog, while the services statement noted that “the services sector outperformed its manufacturing counterpart. Industrial investment goods gained momentum in April as production and sales increased, showing signs of improving downstream conditions that are gradually benefiting upstream markets.
This article originally appeared on Newsquak
