Next week, markets are likely to focus on key data/policy actions in DMs, including flash PMIs in the Euro area (expect a slight decline), BoE Minutes (look for signs of disagreement), and BoJ meeting (expect no change in policy).
In DMs, the highlights of the week include [on Monday] Euro area construction output, Japan Machine Orders; [on Tuesday] UK CPI inflation (expect 1.70%, same as consensus), Japan Industry Activity Index, and Australia MPC minutes; [on Wednesday] FOMC minutes, Euro area consumer confidence, and BoE minutes (disagreements could have arisen on the degree of spare capacity; our UK economists remain more dovish than consensus and expect the first hike in 3Q 2015), and BoJ meeting (expect no change in policy; we still think it could take further action in July, but given time lag in price data releases, we see growing possibility that it may wait until October [link]; and we have stressed the need to not just focus on incremental easing [link]); [on Thursday] US Markit Manuf. PMI, existing home sales, and Leading Index, Euro area PMIs (we expect composite at 53.8 vs. consensus at 54.2), Japan PMI; and [on Friday] US New Home sales, Canada CPI, Germany IFO Business Climate.
In EMs, attention will focus on the continuation of market moves following India’s election (we think the outcome is bullish for markets), GDP prints in LatAm and Asia, China’s HSCB Flash PMI (expect trend to lag slightly), and MP Decisions in Turkey, South Africa, and Nigeria (expect rates on hold). Among other releases, markets will likely focus [on Monday] Thailand GDP (expect 1.8% yoy), Chile (expect 2.4%); [on Tuesday] Singapore GDP, Nigeria MP Decision (rates on hold; relatively uneventful); [on Wednesday] South Korea 20-day exports, CPI in Malaysia, South Africa and Brazil; [on Thursday] China HSBC Manufacturing PMI (expect 48, similar to consensus, vs. previous 48.1); [on Friday] activity prints in Argentina, Mexico, and Taiwan.
CALENDAR
Monday, May 19
- Events: Speeches by Germany’s Merkel and Schaeuble, ECB’s Coeure, Mersch, Nowotny and Weidmann, IMF’s Lagarde; Panel with Carstens, Hubbard, Warsh, Okadaon on Monetary Policy; Panel Discussion by Fed’s Fisher and Williams; BoE Publishes Feedback on Stress Test Discussion Paper; NATO’s Rasmussen Press Conference.
- Euro area | Construction Output MoM (Mar): Previous (r) 0.10%, (6.70% yoy)
- Japan | Machine Orders MoM (Mar): Consensus 6.80% (5.00% yoy), previous (r) -8.80% (10.80% yoy)
- Hong Kong | Composite Interest Rate (Apr): Previous (r) 0.41%
- Ukraine | Industrial Production MoM (Apr): Consensus 0.20% (5.80% yoy), previous (r) 7.40% (-6.80% yoy)
- Poland | Average Gross Wages MoM (Apr): Consensus -0.80% (4.00% yoy), previous (r) 4.20% (4.80%)
- Also interesting: [DM] Spain Trade Balance; Sweden Unemployment; UK Rightmove House Prices; New Zealand PSI, PPI; Hong Kong Unemployment [EM] Chile CA; Philippines BoP; Czech Republic PPI and Export/Import Prices; Poland Employment; Argentina Unemployment.
Tuesday, May 20
- Events: Speeches by Fed’s Plosser and Dudley, BoE’s Bean, RBA’s Dabelle, SNB’s Jordan, ECB’s Nowotny; Russia’s Putin visits China.
- Norway | GDP Mainland QoQ (1Q): previous (r) 0.60%
- United Kingdom | CPI YoY (Apr): consensus 1.70%, previous (r) 1.60%
- United Kingdom | CPI Core YoY (Apr): consensus 1.70%, previous (r) 1.60%
- United Kingdom | Retail Price Index (Apr): previous (r) 2.50%
- Japan | All Industry Activity Index MoM (Mar): Consensus 1.60%, previous (r) -1.10%
- Australia | MP Decision Minutes
- Singapore | GDP SAAR QoQ (1Q F): Consensus 1.20% (5.40% yoy), previous (r) 0.10% (5.10% yoy)
- Taiwan | Export Orders YoY (Apr): Consensus 5.20%, previous (r) 5.90%
- Poland | Sold Industrial Output YoY (Apr): Consensus 5.10%, previous (r) 5.40%
- Also interesting: [DM] Germany PPI; Italy Industrial Orders; Norway Consumer Confidence; UK PPI, ONS House Prices; Australia Conf. Board Leading Index; Japan Leading Index, Machine Tool Orders; South Korea PPI [EM] Taiwan CA; Poland PPI; Colombia Trade Balance.
Wednesday, May 21
- Events: BoJ’s Kuroda Press Conference; Speeches by Fed’s Yellen (NYU Commencement), Dudley, George, Kocherlakota, EU’s Van Rompuy and Barroso, Bank of Spain’s Duran, BoE’s Haldane.
- United States | FOMC Minutes
- Euro area | Consumer Confidence (May A): Consensus -7.9, previous (r) -8.6
- United Kingdom | MP Decision Minutes
- Japan | Monetary Policy Decision: Goldman does not expect any change in policy (base target at ¥270T, same as consensus and previous). Given the time lag in price data releases, there is a growing possibility that the BOJ will wait until the October Outlook Report to take additional easing action, but it could take further action at its July meeting. First, the BOJ is starting to put in place a framework for monitoring prices more or less in real time, alleviating the effects of time lags in data releases. Second, it is likely the BOJ, the Abe administration, which is due to unveil its second wave of growth strategies in June, and the Ministry of Finance, which is targeting a second hike in the consumption tax, will unite to mitigate risks.
- Japan | Trade Balance Adjusted (Apr): Consensus -¥568.4B, previous (r) - ¥1714.2B
- Australia | Wage Cost Index QoQ (1Q): consensus 0.70%, previous (r) 0.70%
- South Korea | 20-day Exports YoY (May): Previous 4.0%
- Malaysia | CPI YoY (Apr): Previous (r) 3.50%
- South Africa | CPI YoY (Apr): consensus 6.20%, previous (r) 6.00%
- Brazil | IBGE Inflation IPCA-15 MoM (May): previous (r) 0.78% (6.19%)
- Also interesting: [DM] Euro area CA; Denmark Consumer Confidence; Switzerland M3; NZ Dairy Auction; Australia Westpac Consumer Confidence [EM] Mexico Retail Sales, Unemployment, Banxico’s Quarterly Inflation Report; Argentina Trade Balance.
Thursday, May 22
- Events: European Parliament Elections throughout EU; Speeches by Fed’s Williams, ECB’s Linde, Polish Central Bank’s Belka, EU’s Van Rompuy.
- United States | Markit US Manufacturing PMI (May P): Consensus 55.5, previous (r) 55.4
- United States | Existing Home Sales MoM (Apr): Consensus 2.20%, previous (r) -0.20%
- United States | Leading Index (Apr): Consensus 0.30%, previous (r) 0.80%
- United States | Kansas City Fed Manf. Activity (May): Consensus 7, previous (r) 7
- Canada | Retail Sales MoM (Mar): Consensus 0.20%, previous (r) 0.50%
- Euro area | Markit Euro area Manufacturing PMI (May P): Consensus 53.5, previous (r) 53.4
- Euro area | Markit Euro area Services PMI (May P): Consensus 53, previous (r) 53.1
- Euro area | Markit Euro area Composite PMI (May P): Consensus 54.2, previous (r) 54
- France | Markit France Composite PMI (May P): Previous (r) 50.6
- Germany | Markit/BME Germany Composite PMI (May P): Previous (r) 56.1
- United Kingdom | GDP QoQ (1Q P): consensus 0.80% (3.10% yoy), previous (r) 0.80% (3.10% yoy)
- United Kingdom | Retail Sales ex Autos MoM (April): Previous -0.4% (4.2% yoy)
- Japan | Markit/JMMA Japan Manufacturing PMI (May P): Previous (r) 49.4
- China | HSBC China Manufacturing PMI (May P): consensus 48.1, previous (r) 48.1
- Hong Kong | CPI Composite YoY (Apr): Previous (r) 3.90%
- South Africa | MP Decision: Goldman expects the repo rate on hold (at 5.50%, same as consensus and previous), on the back of the marginal easing of inflationary pressures from the recent FX market rally. Since divergence of views also occurs within the MPC, GS expects the statement to keep a hawkish tone to balance a holding decision, which effectively reflects a dovish bias.
- Turkey | MP Decision: Goldman expects all rates unchanged (Benchmark Repo Rate at 10.0%, OLR at 12.0%, OBR at 8.0%). However, in the accompanying policy statement, the bank expects the bank to sound dovish and open the door to possible future easing, putting stronger emphasis on the recent compression in Turkey’s risk premium, the acceleration in rebalancing of the economy and the related slowdown in credit volumes. This is broadly in line with consensus.
- Israel | Manufacturing Production MoM (Mar): Previous 3.40%
- Russia | Real Wages YoY (Apr): Consensus 2.50%, previous (r) 3.10%
- Also interesting: [DM] US Chicago Fed Nat Activity Index; Flash manufacturing and services PMIs in France and Germany; France Business Confidence; Norway Unemployment; UK Services Output, CBI Industrial Trends Survey, PSNB ex Interventions; Denmark Retail Sales; Australia Consumer Inflation Expectations; NZ ANZ Job Advertisements, Consumer Confidence and Inflation Expectations; Taiwan Unemployment; Foreign Buying Japan Bonds [EM] Russia Unemployment and Real Disposable Income, Investment Statistics, Retail Sales; Mexico Bi-Weekly CPI and Unemployment; Brazil Unemployment.
Friday, May 23
- Events: Speeches by ECB’s Lautenschlager and Linde, Spain’s Economy Minister de Guindos; Sovereign Ratings may be published for France (Moody’s), Greece (Fitch), Netherlands (S&P), Slovenia (Moody’s), Spain (S&P) and/or UK (Moody’s).
- United States | New Home Sales MoM (Apr): Consensus 10.6%, previous (r) -14.50%
- Canada | CPI NSA MoM (Apr): Consensus 0.20% (1.90% yoy), previous (r) 0.60% (1.50% yoy)
- Germany | GDP SA QoQ (1Q F): Previous (r) 0.80% (2.50% yoy)
- Germany | IFO Business Climate (May): Consensus 111, previous (r) 111.2
- Sweden | NIER Business and Consumer Survey (May): Previous 102.6
- Singapore | CPI NSA MoM (Apr): Previous (r) 0.30% (1.20% yoy)
- Taiwan | Industrial Production YoY (Apr): Consensus 3.00%, previous (r) 3.05%
- Mexico | Economic Activity IGAE YoY (Mar): previous (r) 1.70%
- Mexico | GDP NSA YoY (1Q): consensus 2.00%, previous (r) 0.70%
- Argentina | Industrial Production MoM (Apr): previous (r) -1.80% (5.90% yoy)
- Also interesting: [DM] Canada Core CPI; Italy Retail Sales and Hourly Wages; Sweden Economic Tendency Survey; Taiwan Commercial Sales [EM] Taiwan GDP (f); Turkey Capacity Utilization; CA in Brazil and Mexico; Brazil FGV Consumer Confidence; Chile PPI
However, looking at just the US, the week is actually shaping up to be quite a snoozer.
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Source: GS and BofA