On Monday 6th: No major news
On Tuesday 7th: Australian RBA Interest Rate Decision, German Balance of Trade and Canadian Ivey PMI
On Wednesday 8th: No major news
On Thursday 9th: Chinese Balance of Trade and UK BoE Interest Rate Decision
On Friday 10th: UK GDP Growth Rate YoY Prel, Canadian Unemployment Rate and American Michigan Consumer Sentiment Prel
Monday 6th of May
No major news.
Major Earnings Releases:
● Williams Companies
● Axon Enterprise
● Coca Cola
● Lucid Grou
● Goodyear Tire&Rubber
● Vertex
Tuesday 7th of May
The Reserve Bank of Australia (RBA) opted to keep the cash rate unchanged at 4.35% during their March meeting. This decision comes as economic growth in the country shows signs of moderation (a GDP of around 1.5% according to the latest data), likely a consequence of the cumulative 425 basis point hike in interest rates over the past two years.
The annual Consumer Price Index (CPI) for the March quarter reached 3.6%, but inflation presents a mixed picture. While the cost of goods has seen a significant decrease, the price of services remains high and is experiencing a slower decline.
The central bank acknowledged uncertainty regarding the future path of interest rates. They avoided committing to either holding or raising rates, highlighting their data-driven approach and cautious risk assessment. They will continue to closely monitor the global economic climate, domestic demand trends, and the evolution of inflation and the labor market.
Despite the hold, market participants generally anticipate the RBA to maintain the cash rate at 4.35% when the official announcement is released at 04:30 AM GMT today.
Germany’s trade performance in February 2024 fell short of expectations.
The nation’s trade surplus narrowed to EUR 21.4 billion, marking a significant decline from the record high of EUR 27.5 billion in January. This figure also fell below market forecasts of EUR 25.5 billion. It was the smallest trade surplus Germany had seen since October 2023.
Market participants forecast a rebound in Germany’s Balance of Trade for March, with an estimated surplus of EUR 23 billion. This data is expected to be released at 06:00 AM GMT.
Canada’s manufacturing sector showed renewed strength in March 2024.
The Ivey Purchasing Managers Index (PMI) jumped to 57.5, marking the highest level in a year and the eighth consecutive monthly increase. This positive trend suggests ongoing expansion in manufacturing activity. PMI is a survey-based index where a reading above 50 indicates expansion.
The report highlighted some areas of improvement. The inventories index and supplier deliveries both increased, suggesting businesses are confident in demand and are building stock to meet it. However, a decline in the price metrics within the PMI indicates that inflationary pressures may be easing slightly.
Despite this positive momentum, market participants are anticipating a slight moderation in April. Forecasts suggest the Canadian Ivey PMI (seasonally adjusted) could dip to 56.8 when the official data is released at 02:00 PM GMT.
Major Earnings Releases:
● Walt Disney
● UBS Group
● Ferrari
● Siemens Healthneers
● Electronic Arts
● Bouygues
● Crocs
● Zalando
● WK Kellogg Co
● Goldman Sachs BDC
● BP
● Fresenius
● UniCredit
Wednesday 8th of May
No major news.
Major Earnings Releases:
● Toyota Motor
● Uber Technologies
● Airbnb
● Shopify
● BMW
● Henkel AG & Co
● Continental
● Puma
● Alstom
● Henkel
Thursday 9th of May
China’s trade performance in March 2024 disappointed market expectations. The trade surplus shrank significantly to USD 58.55 billion, down from USD 78.43 billion in the same month a year earlier. This figure also fell considerably short of market forecasts of USD 70.2 billion.
The decline can be attributed to a surprising drop in both exports and imports. While a decrease in exports was anticipated, the unexpected fall in imports contributed to the narrower surplus. Despite this, China still maintains a positive trade balance, with a surplus of USD 22.94 billion with the United States in March.
Looking at the bigger picture, China has accumulated a trade surplus of USD 183.71 billion for the first quarter of 2024. Market participants remain cautiously optimistic, forecasting a potential rebound in the trade surplus to USD 62.0 billion for April when the data is released at 03:00 AM GMT.
The Bank of England (BOE) struck a cautious tone at their March meeting, choosing to hold interest rates steady at 5.25% - the highest level since 2008. This decision reflects policymakers’ desire for more evidence that inflation is truly under control before raising or lowering rates.
Recent data provided some positive signs. The country’s Consumer Price Index (CPI) rate dropped to 3.4%, its lowest level in nearly two and a half years. This decrease likely influenced the vote, which saw an 8-1 majority in favor of holding rates steady. Interestingly, one member dissented, advocating for a 25 basis point reduction.
Governor Bailey acknowledged the positive economic trajectory, suggesting conditions could be ripe for future rate cuts. However, he emphasized the need for clearer evidence that rising prices are under control before such a move could be made.
Despite the hold, market participants don’t expect any changes in the near future. Forecasts predict the BOE will keep the Bank Rate at 5.25% when the official announcement is released at 11:00 AM GMT.
Major Earnings Releases:
● Telefonica
● Warner Bros Discovery
● Hyatt Hotels Corp
● Dropbox
● Pirelli&C
● Varta
● Aurora Cannabis
Friday 10th of May
The British shrunk by 0.2% year-on-year in the final quarter of 2023, which marks the first contraction since the depths of the 2020-2021 recession. Several factors contributed to this decline, including high inflation putting a strain on consumers, rising borrowing costs impacting businesses, and a slowdown in external demand.
Market participants predict a slight rebound in the first quarter of 2024, with an anticipated growth rate of 0.5% year-on-year for UK GDP when the data is released at 06:00 AM GMT.
Canada’s unemployment rate took an unexpected turn in March 2024, jumping to 6.1% – the highest level since October 2021. This represents a significant increase from 5.8% the previous month and falls well above market expectations of 5.9%.
This development aligns with the Bank of Canada’s (BoC) recent warnings about the potential impact of higher interest rates on the labor market. Dovish members of the BoC’s Governing Council may see this as evidence that a rate cut might be necessary by the second quarter to mitigate these effects.
Investors will be looking at the evolution of the unemployment rate when the data is released at 12:30 PM GMT.
The University of Michigan’s consumer sentiment index for the US painted a slightly gloomier picture in April 2024.
Initially estimated at 77.9, the revised figure came in at 77.2, marking a decline from the previous month’s reading of 79.4, which was the highest since July 2021. This revision reflects a greater than anticipated drop in both current conditions and expectations. Inflation expectations showed mixed signals. While expectations for the year ahead climbed slightly to 3.2% from 3.1%, the five-year outlook remained steady at 3%.
Surveys of Consumers Director Joanne Hsu pointed out that consumers are expressing significant uncertainty about the future economic outlook. This is likely due to the upcoming election and the potential for policy changes that could impact the economy.
Despite the dip in sentiment, market participants are predicting a rise in the American Michigan Consumer Sentiment index to 78 when the official data is released at 02:00 PM GMT.
Major Earnings Releases:
● Honda Motor
● Equinix
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