Markets found a bit of calm ahead of Easter with fewer storms and more hopes, especially for a trade deal. What’s next? The first release of US GDP stands out as markets return to business. Here the highlights for the next week.
The pre-Easter week was dominated by the dollar, that gained some ground but did not go anywhere fast. The greenback enjoyed upbeat retail sales and also weakness in other places. Germany’s manufacturing PMI remained in the doldrums while the pound suffered from concerns about Brexit. Not all was great in the US, as housing data disappointed. Nevertheless, the figures came out on Good Friday, and the market reaction was muted.
- US Existing Home Sales: Monday, 14:00. Sales of second-hand homes bounced from the trough below 4 million annualized homes back in February and leaped to 5.51 million. The housing sector is showing signs of recovery. The report for March may confirm the fresh uptrend. A level of 5.13 million is on the cards.
- US New Home Sales: Tuesday, 14:00. While sales of new homes consist only a small part of the market, every sale triggers additional economic activity around it. Similar to existing homes, a rebound was recorded with 667K annualized sales in February. 647K is expected.
- Australian inflation data: Tuesday, 1:30. The land down under releases inflation data only once per quarter, making every publication more meaningful. The Reserve Bank of Australia recently went dovish and the data will serve as a considerable input towards the next rate move. Headline Consumer Price Index rose by 0.5% in Q4 2018. The Trimmed Mean CPI lagged with 0.4%. CPI is forecast to rise by 0.2% and the Trimmed Mean CPI by 0.4%.
- German Ifo Business Climate: Wednesday, 8:00. After ZEW’s survey of businesses rose back up to positive territory, the real test comes from Germany’s No. 1 Think Tank. Has the old continent’s largest economy bottomed out? A score of 99.6 points was seen in March. The data for April is due now. A level of 99.9 is forecast.
- Canadian rate decision: Wednesday, 14:00. The Bank of Canada recently made a dovish tilt, following the lead of other central banks. Officials see a potential of growth without inflation. In addition, the fresh BOC Business Survey showed a deterioration in economic conditions. The BOC is not expected to cut interest rates at this juncture, but Governor Stephen Poloz may provide further comments on the next policy moves in his press conference. The Ottawa-based institution also releases new forecasts.
- Japan rate decision: Thursday, early in the day. The Bank of Japan remains the most dovish central bank in the developed world despite a dovish tilt from quite a few central banks. The BOJ is due to leave the interest rate at -0.10% and pledge to hold down the long-term interest rate, by targeting a low 10-year yield. BOJ Governor Haruhiko Kuroda will hold a press conference at the wake of the European session to explain the decision.
- US Durable Goods Orders: Thursday, 12:30. Orders of durable goods serve as an excellent gauge of investment and are closely watched by the Federal Reserve. The report is for March and serves as input towards the GDP data on the following day. In February, headline orders dropped by 1.6%, but core orders rose by 0.1%. The headline tends to be volatile. Markets are hoping for increases this time. Headline sales are projected to rise by 0.7% and core sales by 0.2%.
- US GDP: Friday, 12:30. The first release of US GDP tends to provide the broadest surprise and the most significant market impact. The US economy grew at an annualized pace of 2.2% in Q4 2018, beating other developed economies. The first quarter of 2019 likely saw slower growth, partly due to the government shutdown. But how much did the economy slow down? Note that expectations may shift in the last minute due to the durables report. A repeat of the 2.2% growth rate is on the cards.
*All times are GMT
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