On Monday 13th: Australian NAB Business Confidence
On Tuesday 14th: UK Unemployment Rate, German ZEW Economic Sentiment Index and US PPI MoM
On Wednesday 15th: US Core Inflation Rate YoY, US Inflation Rate YoY, US Retail Sales MoM and Japanese GDP Growth Rate QoQ Prel
On Thursday 16th: US Building Permits Prel
On Friday 17th: Chinese Industrial Production YoY and Chinese Retail Sales YoY
Monday 13th of May
Australia’s NAB Business Confidence Index showed a slight improvement in March 2024, rising to 1 from 0 in the previous month. However, the index remained below its historical average. The positive sentiment was primarily driven by gains in retail, construction, and transportation sectors.
Overall business conditions stayed relatively unchanged. While sales and employment levels held steady, profitability dipped. There were some positive signs, though, with forward orders becoming less negative and capacity utilisation showing a slight decline. Labour cost growth also moderated, falling to 1.6% on a quarterly basis compared to 2.0% earlier. Purchase cost growth followed a similar trend, slowing down to 1.4% from 1.8%. Retail price growth also saw a slight decrease, down to 1.3% from 1.4%.
Markets are anticipating a further rise in the NAB Business Confidence Index for April with the index reaching 2 when the data is released at 1:30 AM GMT.
Major Earnings Releases: nothing
Tuesday 14th of May
The unemployment rate in the United Kingdom increased to 4.2% for the three months ending February 2024. This is up from 3.9% in the prior period and surpassed market expectations of 4.0%. Looking ahead, market participants anticipate the unemployment rate to hold steady at 4.2% for March, when the official data is released at 06:00 AM GMT.
Germany’s economic outlook brightened in April 2024, with the ZEW Indicator of Economic Sentiment reaching its highest level since February 2022 at 42.9, a significant increase from 31.7 in March. This positive shift reflects optimism among analysts, with half of those surveyed expecting the German economy to improve in the coming six months.
Several factors contributed to this growing confidence.
Analysts are more favourable in their assessment of the overall economic situation, particularly for key German export destinations. Additionally, the strengthening of both the dollar and euro is seen as a positive sign.
Analysts are anticipating a continued improvement to 45 when the data is released at 09:00 AM GMT in May.
Producer prices in the United States exhibited a slowdown in March 2024. The Producer Price Index (PPI) rose by 0.2% compared to the previous month, marking the smallest increase since December 2023. This follows a larger increase of 0.6% in February and falls short of analysts’ expectations of 0.3%.
However, year-on-year, producer prices witnessed a sharper rise. The annual PPI reached 2.1%, the highest level since April 2023. This is an increase from the 1.6% annual increase observed in February. The core PPI, which excludes volatile food and energy prices, also inched up by 0.1% on a monthly basis. However, the annual rate climbed to 2.4%.
Looking ahead, market participants expect producer prices to hold steady at 0.2% month-over-month when data for April is released at 12:30 PM GMT.
Major Earnings Releases:
● Alibaba Group
● Home Depot Inc
● Sony Group
● Hannover Rueck
● Bayer
● Veolia
● Porsche
● Rheinmetall
Wednesday 15th of May
The annual inflation rate in the United States for core consumer prices dipped in March 2024. This measure, which excludes volatile items like food and energy, reached a near three-year low of 3.8%. This reading matched the inflation rate from February and was slightly higher than what analysts had predicted (3.7%). Markets are anticipating a further decline in the core inflation rate for April. Inflation is expected to fall to 3.7% when the official data is released at 12:30 PM GMT.
Inflation in the United States continued to climb in March 2024, reaching 3.5% year-over-year. This marks the highest inflation rate since September 2023 and comes after a previous increase in February.
Energy costs played a significant role in the rising inflation, increasing by 2.1%. While food and shelter prices remained relatively stable compared to the previous month, sharp increases were observed in transportation and apparel costs. Interestingly, prices for new and used vehicles actually declined.
Looking at the month-over-month changes, the Consumer Price Index (CPI) rose by 0.4%, mirroring the increase in February. Core inflation, which excludes volatile food and energy prices, held steady at 3.8% year-over-year, exceeding market forecasts of 3.7%. Similarly, the core monthly inflation rate remained unchanged at 0.4%.
Despite the recent trend, financial markets anticipate inflation to hold steady in April at 3.5%, when the official data is released at 12:30 PM GMT.
Consumer spending in the United States exhibited continued strength in March 2024, with retail sales rising by 0.7% compared to the previous month. This follows an upward revision of the February data, which showed a 0.9% increase. These figures suggest that American consumers remain comfortable spending despite ongoing economic concerns.
The growth wasn’t uniform across all retail sectors.
Eight out of thirteen categories saw sales increases. The most significant gains were observed in online retailers (nonstore retailers), gasoline stations, miscellaneous stores (like convenience stores), and stores selling building materials and garden equipment. However, some sectors experienced declines. These included sporting goods stores, hobby stores, bookstores, clothing stores, electronics and appliance stores, department stores, auto dealerships, and furniture stores.
Markets are anticipating a slowdown in retail sales growth for April with a modest increase of 0.3% month-over-month, when the data is released at 12:30 PM GMT.
Japan’s economy narrowly avoided falling into recession in the fourth quarter of 2023, with GDP expanding by 0.1% quarter-over-quarter. This revised figure was a positive surprise, compared to the initial estimate of a 0.1% decline and a sharper contraction of 0.8% in the previous quarter.
Several factors contributed to this modest improvement. A significant upward revision of capital expenditure, indicating increased business investment, played a key role. Additionally, net trade provided a positive boost, as exports outpaced imports.
However, there were still areas of weakness. Private consumption, which makes up a substantial portion of the Japanese economy (around 60%), contracted for the third consecutive quarter. This suggests that household spending remains sluggish.
Furthermore, government spending and public investment also fell more than initially anticipated.
Analysts expect the preliminary GDP growth rate for the first quarter of 2024 to hold steady at 0.1% when the data is released at 11:50 PM GMT.
Major Earnings Releases:
● Cisco Systems
● Mitsubishi UFJ
● Allianz
● Compass Group
● Burberry Group
● Ubisoft Entertainment
● Merck
● RWE
● E.ON
Thursday 16th of May
Building permits in the United States witnessed a downward trend in March 2024. After a modest increase of 2.3% in February, permits dropped by 3.7% to a seasonally adjusted annual rate of 1.467 million. This revised figure represents the lowest level since September 2023. The decline points towards continued sluggishness in the housing market, likely influenced by historically high borrowing costs.
Financial markets anticipate a further decrease in building permits for April. Their forecast is for the preliminary data, expected to be released at 12:30 PM GMT, to show a permit issuance rate of 1.465 million.
Major Earnings Releases:
● Walmart Inc
● Siemens
● Deere & Co
● Deutsche Telekom
● Baidu
● Sage
Friday 17th of May
China’s industrial sector witnessed a slowdown in growth in March 2024. Year-on-year production rose by 4.5%, a significant decrease compared to the combined 7% growth observed in the first two months of the year. This represents the weakest expansion in industrial output since September 2023, with all activity sectors experiencing softer increases. On a monthly basis, industrial output dipped slightly by 0.08%.
Despite the slowdown, the first quarter of 2024 still managed to see a 6.1% increase in industrial output year-on-year. Markets are anticipating a partial recovery, with expectations for China’s industrial production growth to pick up to 4.8% in April when the official data is released at 02:00 AM GMT.
China’s retail sector experienced a significant slowdown in growth in March 2024. While retail sales still managed to rise by 3.1% year-on-year, this pales in comparison to the robust 5.5% growth recorded in February. This marks the 14th consecutive month of expansion in retail sales, but it’s also the weakest gain since July 2023.
Looking at the bigger picture, the first quarter of 2024 saw retail sales grow by a moderate 4.7% year-on-year. This suggests a potential softening in consumer spending, which is a key driver of the Chinese economy.
Market participants expect China’s retail sales to inch up to 3.2% in April when the data is released at 02:00 AM GMT.
Major Earnings Release:
● Engie
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