On Monday 27th: German Ifo Business Climate
On Tuesday 28th: No major news
On Wednesday 29th: Australian Monthly CPI Indicator, Japanese Consumer Confidence, German GfK Consumer Confidence and German Inflation Rate YoY Prel
On Thursday 30th: American GDP Growth Rate QoQ 2nd Est
On Friday 31th: Chinese NBS Manufacturing PMI, French Inflation Rate YoY Prel, European Inflation Rate YoY Flash, Canadian GDP Growth Rate Annualized, American Core PCE Price Index MoM, American Personal Income MoM and American Personal Spending MoM
Monday 27th of May
The Ifo Business Climate indicator for Germany has climbed for the third consecutive month, reaching 89.4 in April 2024. This marks the highest level of optimism for Europe's largest economy since May 2023.
Several factors are fueling this positive outlook.
Firstly, German companies are increasingly hopeful of potential interest rate cuts by the European Central Bank (ECB). Lower interest rates would make borrowing more affordable for businesses, potentially stimulating investment and economic activity. Secondly, there are signs that inflationary pressures might be easing, which would improve business profitability and consumer spending power.
As a result of this newfound optimism, companies are less pessimistic about the future. They also hold a more positive view of the current business climate compared to recent months. Market participants are anticipating this positive trend to continue, with forecasts suggesting the German Ifo Business Climate for May to reach 91.5 when data is released at 8:00 AM GMT.
Wednesday 29th of May
Australia's inflation rate ticked upwards in March 2024, reaching 3.5% year-on-year. This marks a slight rise from the previous quarter's 3.4%, which was the lowest level since November 2021.
The increase can be primarily attributed to rising housing and transportation costs. Despite the slight uptick, market participants appear optimistic, forecasting a decrease in the inflation rate for April to 3.3% when the data is released at 1:30 AM GMT.
Consumer confidence in Japan took a dip in April 2024, with the index falling to 38.3 from the previous month's reading of 39.5. This marked the lowest level in three months and a significant decline from April 2019, which had been the highest point in recent years.
The data suggests a weakening sentiment among Japanese households across all measured components. This could be attributed to various factors, such as concerns about inflation, rising costs of living, or global economic uncertainties.
The decline has prompted questions from market participants about the trajectory of consumer confidence, so they’ll closely watch the release of the data for May at 5:00 AM GMT to see if the downward trend will continue.
A glimmer of hope emerged for German consumer confidence in May 2024. The GfK Consumer Climate Indicator rose to -24.2, marking the highest reading in two years, up from a revised -27.3 in the previous period. While sentiment has undoubtedly improved, it remains in subdued territory.
This modest recovery could be attributed to various factors, such as a potential easing of inflationary pressures or a more optimistic outlook on the job market. However, underlying concerns likely persist, keeping overall confidence from reaching pre-pandemic levels.
Market participants expect the German GfK Consumer Confidence Index for June to improve further to -23 when the data is released at 6:00 AM GMT.
Germany's inflation rate held steady at 2.2% in April 2024. This marks a continuation of the near three-year low observed in March, bringing the inflation rate closer to the European Central Bank's target of 2%.
While inflation remained subdued, there were some internal shifts. A slowdown in service sector inflation was balanced out by a rise in food prices and a less significant decrease in energy costs compared to previous months. This suggests that inflationary pressures are not entirely uniform across different sectors of the German economy. The data will be released at 12:00 PM GMT.
Major Earnings Releases:
● Salesforce
● Hewlett Packard
● BAE systems
● Roll-Royce Holdings
● Admiral Group
Thursday 30th of May
The US economy hit the brakes in Q1 2024, expanding at a sluggish 1.6% annualized rate in the first estimate. This is a significant slowdown from the previous quarter and the weakest growth since mid-2022.
Consumer spending and non-residential investment softened, suggesting a cautious economic outlook. However, there were some bright spots - equipment investment bounced back and spending on intellectual property surged.
Government spending grew modestly, while exports slowed and imports rose sharply, potentially indicating a slowdown in global demand for US goods. Businesses also reduced their stockpiles slightly.
The lone bright spot was a double-digit jump in residential investment, hinting at a potential pick-up in the housing market. Market participants expect the final GDP growth figure for Q1 to remain the same at 1.6% when the data is released at 12:30 PM GMT.
Major Earnings Releases:
● Dell Technology
● Autodesk
Friday 31th of May
China's manufacturing sector witnessed a slight moderation in growth during April 2024. The official National Bureau of Statistics (NBS) Manufacturing Purchasing Managers' Index (PMI) dipped to 50.4, down from a 12-month high of 50.8 recorded in March.
This marks the second consecutive month of expansion in factory activity. The Chinese government's ongoing efforts to stimulate economic growth appear to be yielding some positive results. However, the slight decline in the PMI suggests a potential for a slower pace of growth moving forward.
Market participants anticipate a further decrease in the PMI for May to 50.2 when data is released at 1:30 AM GMT.
Data scheduled for release at 06:45 AM GMT will reveal if France's annual inflation rate kept falling in May 2024. The confirmed rate of 2.2% for the month of April represents a small decrease from the previous month's 2.3%, which markets the lowest level of inflation in the country since September 2021, suggesting a potential easing of price pressures.
Inflation in the Euro Area remained steady at 2.4% in April 2024, which marks a continuation of the March figure, keeping inflation at levels not observed for nearly three years. This represents a significant improvement compared to a year earlier, when inflation soared to a much higher rate of 7%.
The European Commission, in its Spring 2024 Economic Forecast, expressed optimism about a faster-than-anticipated decline in inflation. Their projections suggest a further decrease to 2.1% by 2025.
However, market participants appear less certain about the immediate trend, as they forecast a slight uptick in inflation to 2.5% for the month of May, when the European Inflation Rate YoY Flash will be released at 9:00 AM GMT.
The Canadian economy showed signs of bouncing back in the final quarter of 2023, after a period of contraction, as it reached 1% annualized growth in GDP (Gross Domestic Product) compared to a revised 0.5% decline experienced in Q3.
Market participants are forecasting for Q1 2024 a continued improvement with a potential rise in GDP growth rate to 1.2% when the data is released at 12:30 PM GMT
Inflation in the United States remained subdued in March 2024, with core PCE prices (excluding volatile food and energy costs) holding steady at a 0.3% monthly increase. This matches the pace of increase observed in February. Year-over-year, core PCE prices also remained unchanged at 2.8%.
Market participants expect the rise of the US Core PCE Price Index MoM for April to decrease to 0.2% when the data is released at 12:30 PM GMT.
Personal income in the United States saw a positive uptick in March 2024, rising by 0.5% compared to the 0.3% increase observed in February, suggesting a potential improvement in household finances.
Market participants anticipate monthly US personal income’s rise for the month of April to remain at 0.3% when the data is released at 12:30 PM GMT.
US consumer spending held steady in March 2024, rising by 0.8% compared to the previous month. This mirrors the growth rate observed in February, suggesting a possible continuation of the same spending patterns.
However, market participants are forecasting a potential slowdown in consumer spending for April when the data is released at 12:30 PM GMT. Their predictions suggest a decrease to 0.4% month-on-month.
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