The week ahead will be driven by the heavy end-of-month data schedule. In addition to the usual key releases like ISM and payrolls and ECB meeting, this week we also get an FOMC meeting - though it will hardly see much more than a nod to the weaker activity data of late. For the ECB meeting a full refi but not a deposit rate cut are priced now. Outside the FOMC and the ECB meeting there will be focus on the RBI meeting in India, with a 25bp cut priced in response to lower inflation numbers recently.
Monday 29th April
- Japan Holiday
- Sweden Minutes of MPC Meeting
- Italy Business Confidence (Apr): Probably too early to reflect the end of government uncertainty. Last reading was 88.9.
- Germany Harmonised CPI Apr (Flash): Consensus expects -0.1% mom versus +0.4% last.
- US PCE Core Price Index (Mar): GS +0.03%. Consensus expects -0.1% versus +0.1% last.
- US Personal Consumption (Mar): GS 0.2%. Consensus expects 0.0% versus 0.7% mom last.
- US Personal Income (Mar): GS 0.3%. Consensus expects 0.4% mom versus 1.1% last.
- US GS Analyst Index (April)
- Also interesting: US Pending Homesales.
Tuesday 30th
- Korea Industrial Production (Mar): GS +1.0% yoy, versus -9.3% yoy last.
- United Kingdom GFK Consumer Confidence (Apr): Consensus expects -26 versus -26 last.
- Japan Labour Market Data (Mar): Focus will be on any evidence of rising wages in response to BoJ easing. For the unemployment rate, consensus expects 4.2% versus 4.3% last.
- Japan Industrial Production (Mar): Consensus expects 0.4% mom versus 0.6% last.
- Spain GDP (Q1): Consensus expects -0.5% qoq versus -0.8% last.
- Turkey CBRT Inflation Report
- Germany Unemployment Change (Apr): Consensus expects +2k versus +13k last.
- Germany Retail Sales (Mar): Consensus expects -0.3% mom versus 0.4% last.
- Italy Unemployment Rate (Mar): Consensus expects 11.7% versus 11.6% last.
- Euro area Harmonised CPI (Apr): Consensus expects 1.6% yoy versus 1.7% last.
- United States Chicago PMI (Apr): GS 52.0. Consensus expects 52.6 versus 52.4 last.
- United States Consumer Confidence (Apr): GS 61.0. Consensus expects 61.0 versus 59.7 last.
- Also Interesting: Japan Retail Sales, South Africa Trade Balance, Chile Manfacturing Index and Retail Sales, Turkey Trade Balance, Taiwan GDP.
Wednesday 1st May
- Korea Trade Balance (Apr): Consensus expects exports to rise by 2.0% yoy versus 0.4% last.
- United Kingdom PMI - Manufacturing (Apr): Consensus expects 48.5 versus 48.3 last.
- United States ADP Employment Change (Apr): Consensus expects 155k versus 158k last.
- United States ISM Survey (Apr): GS 50.0. Consensus expects 51.0 versus 51.3 last.
- United States FOMC Meeting Results: Our baseline expectation is that the FOMC statement will show only modest changes, mostly or entirely in the first paragraph discussing the weaker economy. A potential surprise would be greater emphasis on downside inflation risks.
Thursday 2nd
- Global PMIs (April): On average, consensus expects only moderate change in the global PMI reading from last month's releases.
- United Kingdom Construction PMI (Apr): Consensus expects 48.0 versus 47.2 last.
- Czech Republic Monetary Policy Meeting
- ECB Meeting: GS and consensus expect a refi rate cut to 0.50% but not a change in the deposit rate. The press conference will be key to gauge if more easing is in the pipeline and with regards to credit policies for the periphery.
- United States Initial Jobless Claims: Consensus expects 346k versus 339k last.
- United States Trade Balance (Mar): GS $-40.0bn. Consensus expects $-42.2bn versus $-43.0bn last.
- Also Interesting: Brazil Trade Balance.
Friday 3rd
- Japan Holiday
- India Central Bank Meeting: Following lower WPI prices and weak activity, consensus expects a cut in the repo and reverse repo rates by 25bp each to 7.25% and 6.25%.
- Services (Apr): Consensus expects 52.4 unchanged.
- Brazil Ind. Production (Mar): GS +1.5% mom. Consensus expects +1.2% mom versus -2.5% last.
- US Labour Market Data (Apr): GS and consensus expect the unemployment rate at 7.6% stable. On payrolls, GS is slightly above consensus at 150k, compared to 143k and 88k in the last release.
- United States ISM Non-Manufacturing Survey (Apr): GS 53.0. Consensus expects 54.0 versus 54.4 last.
- Also Interesting: Norway PMI, Brazil IP, US Factory Orders.
And from SocGen:
Key Issues for the week ahead, and their market impact also via SocGen
TOP ISSUES FOR THE WEEK AHEAD NO IMPACT IF ECB CUTS
Market consensus is for a 25bp ECB rate cut Thursday, but both the ECB and market experts agree that the widely expected move would have no impact. We remain in a minority of calling for rate to remain on hold, but recognise that it’s a close call.
MARKET ISSUES: The real debate is what more the ECB could do that would actually boost growth. Financial fragmentation is the issue and unless backed by governments and regulators, our answer is not much (click here for details).
FOCUS ON THE DATA NOT THE FED
Wednesday’s FOMC meeting is set to prove uneventful and until the minutes are released on 22 May, focus will be on the data. We expect the April employment report to show payroll gains of 175K and the unemployment rate to decline to 7.5% (i.e. 1pp above the level set in the Fed’s rate guidance). Ahead of Friday’s job numbers, market participants will have an exceptionally dense week of data to analyse. The key report mid-week is April PMI, which should show that manufacturing barely expanded in April at 50.2.
MARKET ISSUES: The data this week will show a decidedly mixed picture on the US economy consistent with the on-going drag from fiscal policy tightening and our view is that Q2 will be the weakest quarter in 2013. As growth picks up in 2H13, the debate on QE exit will return. This week, however, expectations for continued QE are set to remain fully in place.
COUNTDOWN TO BOE MEETING
The MPC next meet on 9 May, but the stronger-than-expected Q1 GDP report at 0.3% qoq means that we last week changed our call from more QE to no action. Even before the release of Q1 GDP, the announced enhancements to the FLS had lowered the odds for action in May. The really big surprise in the Q1 GDP report was a boost in services output by 0.6% qoq. Looking ahead, we continue to see a stall speed pace of growth for the UK. Notably, the international backdrop remains very frail, something that we expect to see confirmed in the April PMI report where we look for 48.0 down from 48.3 previously.
MARKET ISSUES: Stronger data and less QE should be good news for Sterling.
JAPAN TO ENJOY THE BEST ASIA DATA
Data from Asia this week is set to paint something of a mixed picture. Japan’s industrial production is set to show further recovery with a 0.3% mom gain in March, while February unemployment is seen unchanged at 4.3%. An expected gain to 51.2 in the official PMI reading for China in April will be mostly due to seasonal factors and the underlying trend remains deceleration. Taiwan’s Q1 GDP report is set to disappoint at just 3.1% yoy reflecting the weak March trade data.
MARKET ISSUES: Japan’s policy boost is set to give the economy a clear advantage in delivering better economic news to the markets.
Source: Goldman Sachs and SocGen

