On Monday 20th: Nothing
On Tuesday 21st: Australian Westpac Consumer Confidence Change, Australian RBA Meeting Minutes, Canadian Inflation Rate YoY and Japanese Balance of Trade
On Wednesday 22nd: RBNZ meeting, UK Inflation Rate YoY and American FOMC Minutes
On Thursday 23rd: German HCOB Manufacturing PMI Flash and Japanese Inflation Rate YoY
On Friday 24th: UK Retail Sales MoM and American Durable Goods Orders MoM
Monday 20th of May
Major Earnings Release:
● Palo Alto Networks
Tuesday 21th of May
Australian consumer confidence continues to slump, with the Westpac-Melbourne Institute Consumer Sentiment index falling for the second straight month in April 2024. The index dipped to 82.4 points (-2.4% in April), reflecting ongoing concerns about inflation and rising interest rates. This marks the longest period below 100 since the early 1990s recession, highlighting a significant decline in consumer optimism.
Despite the gloomy consumer sentiment, there are conflicting signals in the Australian economy. While markets anticipate the Reserve Bank of Australia (RBA) to begin lowering rates later this year, robust job growth and rising house prices add some complexity to the picture. This mixed bag of data has led market participants to expect a slight uptick of 0.9% when the May Westpac Consumer Confidence data is released at 12:30 AM GMT.
The Reserve Bank of Australia (RBA) opted to hold its cash rate steady at 4.35% during its May meeting, a decision widely anticipated by markets. This marks the fourth consecutive meeting where borrowing costs have remained unchanged, following the last hike in November 2023.
While cost pressures have started to ease, the pace of decline falls short of expectations and the RBA needs a clear path towards the 2-3% inflation range before taking any action. Further complicating the situation are uncertainties surrounding the time it takes for monetary policy adjustments to take effect, alongside how businesses and wages will respond to slower economic growth.
To gain even deeper insights into the RBA's thought process and potential future actions, investors and traders should keep an eye out for the RBA Meeting Minutes scheduled for release at 1:30 AM GMT.
Canada's inflation rate edged slightly higher in March 2024, reaching 2.9% compared to the 8-month low of 2.8% in February. This modest rise was driven primarily by a surge in gasoline prices, which pushed transportation inflation to 3%.
The Bank of Canada's extended period of high interest rates, coupled with rising US Treasury yields, had a significant impact on mortgage costs. Year-over-year mortgage interest rates climbed a substantial 25.4%, leading to faster growth in average rents. Consequently, rents inflation remained elevated at 6.5%. Food inflation showed signs of slowing down, while deflation in the clothing and footwear sector moderated.
Despite the recent uptick, market participants anticipate April’s inflation rate to hover around 2.8% when the official data is released at 12:30 PM GMT.
Japan's trade balance shifted to a surplus of JPY 366,467 billion in March 2024 from a deficit of JPY 750,854 billion in the same period of the prior year. It was the first trade surplus in three months, as exports grew while imports fell. Will the Japanese Balance of Trade for April improve or worsen? Follow the data release at 11:50 PM GMT.
Major Earnings Releases:
● Assicurazioni Generali
● Kingfisher
Wednesday 22th of May
The Reserve Bank of New Zealand (RBNZ) opted to maintain its official cash rate (OCR) at 5.5% during their April 2024 policy meeting, extending their rate pause for the sixth consecutive time. This decision reflects the RBNZ's assessment that the current monetary policy stance is necessary to further reduce inflationary pressures and bring inflation closer to their target range.
While there have been positive signs, with New Zealand's headline inflation falling to a two-and-a-half-year low of 4.7% in Q4 of 2023, it still remains significantly above the target of 1% to 3%. The committee believes that holding the OCR at a restrictive level for an extended period is necessary to ensure a sustained return of annual consumer inflation to their desired range.
Following this extended period of holding rates steady, market expectations are for the RBNZ to maintain this stance at their upcoming meeting today. Investors will be closely watching for the RBNZ's monetary policy decision scheduled for release at 2:00 AM GMT. This announcement will shed light on the central bank's view of the evolving economic landscape and their potential future actions.
The United Kingdom saw some relief on the inflation front in March 2024. The year-on-year inflation rate dropped slightly to 3.2%, down from 3.4% in the previous month. While this marks the lowest inflation rate since September 2021, it still fell short of market expectations of 3.1%. The primary driver behind this decline seems to be a slowdown in food price inflation.
Positive signs emerged from the core inflation rate as well, which excludes volatile items like energy and food. This core rate dropped to 4.2%, the lowest since December 2021. On a monthly basis, however, consumer prices remained steady, rising by 0.6% in March, mirroring February's increase.
Looking ahead, market participants are eager to see if the positive trend continues or if inflation has started to pick up again. They will be closely following the release of the UK Inflation Rate YoY data for April, scheduled for 6:00 AM GMT.
The Federal Reserve (Fed) opted to hold its fire for the sixth consecutive meeting in May, keeping the target range for the federal funds rate unchanged at 5.25%-5.50%. This decision reflects the ongoing challenge of curbing inflation.
Policymakers acknowledged some moderation in inflation over the past year, but it remains stubbornly high. Recent Producer Price Index (PPI) and Consumer Price Index (CPI) figures indicate a lack of further progress towards the central bank's 2% inflation target for 2024.
Despite this, Chair Powell downplayed the likelihood of an upcoming rate hike, expressing confidence that the current policy stance is sufficiently restrictive to achieve the target. However, the Fed hinted at the possibility of maintaining high rates for an extended period, potentially longer than previously anticipated.
Investors and analysts will be keenly awaiting the release of the FOMC Minutes at 6:00 AM GMT, as they will provide deeper insights into the Fed's discussions and reasoning behind their decision. They'll be looking for clues about the central bank's future path and how they plan to navigate the complex economic landscape.
Major Earnings Releases:
● NVIDIA
● Synopsys
● Swiss Life Holding
● Severn Trent
Thursday 23th of May
Germany's manufacturing sector offered a mixed bag of signals in April. While the HCOB Flash Germany Manufacturing PMI rose to 42.5 in April 2024, up from 41.9 in March, indicating a slower decline in production, new orders continued to fall at an accelerated pace, with the steepest drop seen in total new work since November.
There were some bright spots, however,with new export orders declining at their slowest rate in a year and job cuts decreasing compared to March. Input prices also saw their slowest decline in 14 months, though output prices experienced a significant drop. Despite a slight improvement in confidence for the year ahead, overall optimism remains relatively low. The market expects to see a further increase in the PMI to 44 when the official data for May is released at 7:30 AM GMT.
Japan's inflation picture showed some signs of moderation in March 2024. The annual inflation rate dipped slightly to 2.7%, down from a recent peak of 2.8% in February. This decrease was driven by slowdowns in prices across various categories, but energy prices, however, remained a point of concern.
While fuel and light prices dropped, the decline was the slowest in a year. Electricity and gas costs also fell at a slower pace, with government subsidies set to fully expire in May, potentially leading to further price increases.
The core inflation rate followed a similar trend. It dipped to 2.6%,falling short of market forecasts of 2.7% but still reflecting a slight improvement from the four-month high of 2.8% recorded earlier. On a monthly basis, consumer prices rose by 0.2% in March, marking the strongest increase since October 2023 after remaining flat for the previous two months.
Investors and analysts will be closely following the release of the Japanese Inflation Rate YoY data for April, scheduled for 11:30 PM GMT, to get a better picture of the inflation situation.
Major Earnings Releases:
● Dollar Tree
● Aviva
Friday 24th of May
Retail sales in the UK remained stagnant in March 2024, showing no change in volume compared to February (which was revised to a slight 0.1% increase). While there were positive signs in automotive fuel sales (up 3.2%) and non-food stores (up 0.5%), these gains were countered by declines in food stores (down 0.7%) and non-store retailers (down 1.5%).
Looking at the year-over-year picture, retail sales showed some improvement, rising by 0.8% after a revised decline of 0.3% in February. Investors are anticipating a pick-up in momentum for April, with market expectations pointing towards a 0.3% increase in UK Retail Sales MoM data scheduled for release at 6:00 AM GMT.
The US manufacturing sector saw a healthy jump in new orders for durable goods in March 2024. Orders surged by 2.6% month-over-month, marking the strongest gain since November 2023 driven by robust demand.
However, orders for non-defense capital goods, a key indicator of future spending plans, rose by a modest 0.2% in March, following a slightly higher revised increase of 0.4% in February.
Analysts predict a decline with American Durable Goods Orders MoM expected to increase 0.3% when the data is released at 12:30 PM GMT.
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