The Week Ahead – Week commencing 6th of May
Major events to watch for this week include another PMI from China, along with an RBA meeting, plus GDP from the UK and CPI from the US.
Economists will this week be looking to the European Commission’s spring economic forecasts on Tuesday, and UK gross domestic product figures, which are out on Friday, especially after Italy moved out of recession and the Eurozone economy brought an unexpected first-quarter rebound last week.
Central banks: Norway’s Norges Bank meets on Thursday, with no rate changes expected. Central banks in Australia, New Zealand, Malaysia, Thailand and the Philippines meet this week amid signs the region is expected to cut interest rates soon. In Latin America, Brazil, Chile and Peru’s central banks are all predicted to keep rates on hold.
Economic data: After weak figures in December, UK growth for January and February has been strong. If that direction continues through March, the UK economy could post growth figures of 0.5 percent for the quarter. A much better result than the 0.2 percent growth forecast by the Bank of England in February.
In the US investors will pay close attention to consumer price figures on Friday as they look for symptoms of developing price pressure after Federal Reserve chair Jay Powell said at the central bank’s latest monetary policy meeting that “transitory” factors may weigh on price growth.
Economists expect consumer prices to increase 0.4 percent month-on-month and so-called core prices, which strip out more volatile items such as food and energy, to rise 0.2 percent on a monthly basis.
In Germany industrial production and factory orders reports will further determine the strength of the Eurozone after last week’s upbeat data.
In February, the European Commission revised growth forecasts for this year down from 1.9 percent to 1.3 percent, with growth of 1.6 percent forecast for 2020.
On Tuesday the commission will provide its final outlook on Eurozone growth and inflation before the bloc’s parliamentary elections.
China publishes the April reading for its official consumer price index next week and all eyes — including a few pairs at the central bank — will be on the reading for pork price inflation.