Key Events This Week: China GDP, Global PMIs, US Retail Sales And Lots Of Earnings

With the Easter holidays looming, markets look forward to a burst in economic and data highlights including the release of Chinese Q1 GDP data, preliminary April PMIs for the Eurozone and the US, US retail sales data for March and a barrage of Q1 earnings. From central banks, we’ll get the Fed’s Beige Book and a decision from the Bank of Korea, along with various speakers. Politically, there’ll be elections in Finland and Indonesia, along with trade talks between the US and Japan. At the end of the week, a number of countries have the Good Friday bank holiday.

As Deutsche's Craig Nicol writes, a major data release for markets will be Chinese GDP for Q1 on Wednesday, where the consensus is that the year-on-year reading will fall slightly to 6.3%, from the previous quarter’s 6.4%. That day will also see the release of March’s industrial production and retail sales data for China, so there’ll be a number of things to look out for. Also from Asia, we’ll  get the March Japanese CPI reading on Thursday, where the consensus expectation is for a rise in the year-on-year reading to 0.5%, up from the previous month’s 0.2%.

Another main highlight will be the preliminary April PMIs on Thursday, with releases for the Eurozone, Germany, France and the United States. It’ll be particularly interesting to see the manufacturing PMI for the Eurozone, which fell for an eighth consecutive month in March, moving deeper into contractionary territory with a 47.5 reading. The German manufacturing PMI was even more contractionary last month, with a 44.1 reading.

In the US, the key economic data releases this week are the retail sales report and the Philadelphia Fed manufacturing index on Thursday.

Other releases to watch out for include US retail sales for March, which are coming out on Thursday, as well as the German ZEW survey for April, which is coming out on Tuesday. In March, the ZEW survey of current expectations fell to 11.1, its lowest level since December 2014, although the expectation reading rose to -3.6, which was its highest since March 2018, so it’ll be worth looking to see if there are any signs of stabilisation. There’ll also be a number of important data releases in the UK, with employment data on Tuesday, inflation data on Wednesday and retail sales data on Thursday. Last month’s employment release saw the UK unemployment rate fall to 3.9% in the November-January period, the first time since 1975 that the UK unemployment rate had fallen below 4%.

After this week’s ECB meeting and the release of the FOMC minutes from March, this week will be a quieter one from central banks. In terms of decisions, the main event this week will be from South Korea, where the Bank of Korea will be making their interest rate decision on Thursday. No change is expected in the main interest rate, which is currently at 1.75%. We’ll also get the release of the minutes of the Reserve Bank of Australia’s April policy meeting on Tuesday, as well as the Fed’s Beige Book on Wednesday.

In terms of central bank speakers, on Monday there’ll be the BoJ’s Wakatabe, the BoE’s Haskel, the ECB’s Villeroy and the Fed’s Evans. On Tuesday, we have the Fed’s Rosengren and Kaplan, as well as the ECB’s Nowotny. On Wednesday, we have the BoE’s Carney and the ECB’s Villeroy de Galhau speaking in Paris, while from the Fed both Harker and Bullard will be speaking. On Thursday, the Fed’s Bostic will be speaking.

In terms of politics, we should see somewhat less of Brexit in the headlines over the coming week as the House of Commons in the UK will not be sitting with the Easter recess, not returning until 23 April. At this week’s European Council summit the EU granted the UK an extension of Article 50 from the previous 12 April deadline to 31 October, although if a deal is passed the UK would be able to leave the EU earlier. Elsewhere, we have various elections this week. On Sunday, Finland held parliamentary elections, and on Wednesday the Indonesian presidential election will be taking place, where incumbent President Joko Widodo is running for a second term in office. There’ll also be continued voting in the Indian general election, with the second round of voting taking place on  Wednesday, as Prime Minister Narendra Modi also seeks a second term. Looking at ongoing trade talks, the Japanese economy minister, Toshimitsu Motegi, will be visiting the US for talks on Monday.

We’ll also get a number of company earnings as earnings season gets into full swing. On Monday, we got Goldman Sachs and Citigroup continuing the banks reporting results, with the former disappointing and the latter reporting stronger than expected fixed income trading. On Tuesday, there’ll be earning releases from Bank of America, Netflix, IBM and Johnson & Johnson. On Wednesday, there’ll be Morgan Stanley and PepsiCo, and on Thursday, there’ll be Philip Morris International and American Express.

It’s also the Good Friday holiday at the end of the week, so we’ll see a number of markets closed in the US and Europe.

A look at key events in the coming week:

  • Monday: It’s a fairly light start to the week with scheduled data releases including the UK's April Rightmove house prices followed by the release of April Empire manufacturing and February TIC flows both in the US. Away from the data, the BoJ's Wakatabe, BoE's Haskel, the ECB's Villeroy and the Fed's Evans are all due to speak. The Japanese economy minister will also be visiting the US for trade talks. Goldman Sachs and Citigroup will release earnings.
  • Tuesday: It’s another quiet day for data with key highlights being the release of March new home prices in China followed by the release of employment data in the UK for the December-February period, as well as the March claimant count rate. We'll also get February construction output in the Eurozone and the April ZEW survey results in Germany and the Eurozone. In the US, we’ll get March industrial production and capacity utilisation along with April's NAHB housing market index, as well as Canada's manufacturing sales for February. In addition to the data releases, the Fed's Rosengren and Kaplan are due to speak, as well as the ECB's Nowotny. Bank of America, Netflix, IBM and Johnson & Johnson will release earnings.
  • Wednesday: It’s a very busy day for data with the key highlight likely to be the release of Q1 GDP in China (overnight). We will also get Japan's March trade balance and China's March macro data dump including retail sales, followed by the release of March new car registrations in the Eurozone along with the February trade balance, final March CPI in Italy and the Eurozone and the UK's March inflation data. In the US, we will get the latest weekly MBA mortgage applications, February trade balance and wholesale inventories data along with the Fed's latest Beige Book. Away from the data, the BoE's Carney, ECB's Villeroy and the Fed's Harker, Bullard and Logan are all due to speak. Meanwhile, the Indonesian presidential election will be taking place. Morgan Stanley and PepsiCo will release earnings.
  • Thursday: The key highlight of the day is the release of preliminary April PMIs in France, Germany, the Eurozone and the US. Besides that we will get employment data from Australia for March, March PPI in Germany, March retail sales and the BoE's credit conditions and bank liabilities surveys in the UK along with the release of March retail sales, April Philadelphia Fed business outlook, the latest weekly initial jobless and continuing claims, March leading index and February business inventories all in the US, and Canadian retail sales for February. Away from the data, the Bank of Korea will be making their latest decision on interest rates and the Fed's Bostic is due to speak. Philip Morris International and American Express will release earnings.
  • Friday: It’s a very quiet day for data with March CPI due in Japan and March housing starts and building permits due in the US. Most markets are likely to remain closed on account of Good Friday holiday including the UK, France and Germany. In the US, stock markets are also going to remain closed.

Finally, looking at just the US, Goldman notes that the key economic data releases this week are the retail sales report and the Philadelphia Fed manufacturing index on Thursday. There are several scheduled speaking engagements by Fed officials this week.

Monday, April 15

  • 08:30 AM Empire State manufacturing index, April (consensus +8.0, last +3.7)
  • 1:00 PM Chicago Fed President Charles Evans (FOMC voter) speaks: Chicago Fed President Charles Evans will discuss the US economy and monetary policy with the New York Association for Business Economics. Audience and media Q&A are expected.
  • 8:00 PM Boston Fed President Eric Rosengren (FOMC voter) speaks: Boston Fed President Eric Rosengren will give a lecture at Davidson College. Prepared text is expected.

Tuesday, April 16

  • 09:15 AM Industrial production, March (GS +0.1%, consensus +0.2%, last flat); Manufacturing production, March (GS flat, consensus +0.1%, last -0.4%); Capacity utilization, March (GS 79.0%, consensus 79.2%, last 79.1%): We estimate industrial production was flat in March, driven by strength in the utilities category and offset by weakness in auto manufacturing. We estimate capacity utilization edged down one tenth to 79.0%.
  • 10:00 AM NAHB housing market index, April (consensus 63, last 62)
  • 2:00 PM Dallas Fed President Robert Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will speak at a community forum hosted by the El Paso branch of the Dallas Fed in Hobbs, New Mexico. Audience and media Q&A are expected.

Wednesday, April 17

  • 08:30AM Trade balance, February (GS -$54.1bn, consensus -$53.5bn, last -$51.1bn): We estimate the trade deficit increased to $54.1bn in February, reflecting a rebound in inbound container traffic but softer outbound trends.
  • 10:00 AM Wholesale inventories, February (consensus +0.4%, last +1.2%)
  • 12:30 PM Philadelphia Fed President Patrick Harker (FOMC non-voter) speaks: Philadelphia Fed President Patrick Harker will discuss the economic outlook at a Greater Vineland Chamber of Commerce event in Vineland, New Jersey. Audience Q&A is expected.
  • 12:30 PM St. Louis Fed President James Bullard (FOMC voter) speaks: St. Louis Fed President James Bullard will give a speech at the annual Hyman P. Minsky Conference on the US and Global Economy at Bard College.
  • 02:00 PM Beige Book, April/May FOMC meeting period: The Fed’s Beige Book is a summary of regional economic anecdotes from the 12 Federal Reserve districts. The March Beige Book reported growth at an overall slight to moderate pace across most Districts. Contacts retained an optimistic outlook overall, but concerns on tariffs, slowing global growth, and trade policy uncertainty continued to weigh on optimism. In the April Beige Book, we look for additional anecdotes related to growth, labor markets, wages, price inflation, and the economic impacts of slowing global growth.

Thursday, April 18

  • 8:30 AM Retail sales, March (GS +1.0%, consensus +1.0%, last -0.2%); Retail sales ex-auto, March (GS +0.7%, consensus +0.7%, last -0.4%); Retail sales ex-auto & gas, March (GS +0.4%, consensus +0.4%, -0.6%); Core retail sales, March (GS +0.3%, consensus +0.4%, last -0.2%): We estimate that core retail sales (ex-autos, gasoline, and building materials) rose 0.4% in March (mom sa), reflecting a lackluster rebound in retail spending data and lower than usual tax refunds. We estimate a 1.0% increase in the headline measure, reflecting a sharp rebound in gasoline prices and auto sales, and a 0.4% increase in the ex-auto measure.
  • 08:30 AM Philadelphia Fed manufacturing index, April (GS +13.0, consensus +10.8, last +13.7): We estimate that the Philadelphia Fed manufacturing index declined by 0.7pt to +13.0 in April after a 17.8pt rebound in March.
  • 08:30 AM Initial jobless claims, week ended April 13 (GS 205k, consensus 205k, last 196k): Continuing jobless claims, week ended April 6 (last 1,713k); We estimate jobless claims increased by 9k to 205k in the week ended April 13, following an 8k decline in the prior week.
  • 09:45 AM Markit Flash US manufacturing PMI, April preliminary (consensus 52.7, last 52.4)
  • 09:45 AM Markit Flash US services PMI, April preliminary (consensus 55.0, last 55.3)
  • 10:00 AM Business inventories, February (consensus +0.3%, last +0.8%)
  • 12:10 PM Atlanta Fed President Raphael Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will speak at the Economic Roundtable of Jacksonville. Audience Q&A is expected.

Friday, April 19

  • US equity and bond markets will be closed in observance of Good Friday.
  • 08:30 AM Housing starts, March (GS +6.0%, consensus +5.9%, last -8.7%); Building permits, March (consensus +0.7%, last -1.6%): We estimate housing starts rose 6.0% in March following last month’s 8.7% decline. Our forecast incorporates boosts from a likely catch-up of single-family starts with firmer permits, lower mortgage rates and stronger construction job growth but a drag from likely mean reversion in the noisy multifamily category.

Source: Deutsche Bank, Goldman, Bank of America