During the upcoming trading week market participants turn their attention to global inflation data, with the United States, Chinese and German economies all releasing key CPI inflation data. What else will drive the markets this week? Gain insight into this 9-13 April Weekly Forex Market Forecast.
9 April, HotForex – It was a tumultuous first week of the quarter that has left the markets caught between more truculent tweets on trade from President Trump, and slightly more diplomatic messages from his advisers. Predictably China countered with $50 bln in tariffs of their own against a variety of U.S. imports, while the White House threatened to lump on another $100 bln tariffs to the $50 bln already on the table.
9-13 April Weekly Forex Market Forecast
Fed Chairman Powell remained bullish on the economy in his speech on the outlook, suggesting “gradualism” remained intact, while in Q&A he felt it was premature to draw implications from the tariff threats either for inflation or growth.
United States Market Overview
The calendar will home back in on inflation stats for March in a timely fashion, hot on the heels of the 0.3% uptick in average hourly earnings embedded in the March payrolls report. PPI is forecast (Tuesday) rising 0.2% in March, though the annual pace will speed up to 2.9% y/y from 2.8% y/y. The core PPI is seen rising 0.2% as well versus 0.2% previously, with a steady 2.5% y/y.
Wholesale sales are projected (Tuesday) to increase 0.6% in February vs -1.1% in January, while inventories are seen 0.2% firmer. The MBA mortgage market report is out (Wednesday), along with overall March CPI expected to edge up 0.1% vs 0.2%, with core CPI seen up 0.2%, as was the case in February. Annual rates should move a tad higher too, with the headline pace seen at 2.4% from 2.2% y/y, while the core rate firms to 2.1% from 1.8%.
This will be the first 2-handle since March 2017, but it won’t trigger a response from the FOMC as CPI is not the Fed’s preferred measure. The Treasury budget deficit (Wednesday) may widen to $186 bln in March from $176 bln year-ago levels.
Import prices are forecast (Thursday) to increase 0.4% in March versus February’s 0.4%, while export prices may rise 0.2%, the same as in February. Initial jobless claims are presumed to correct back down 17k to 225k for the week ended April 7 (Thursday). Rounding out the week (Friday) are Michigan sentiment and the Fed’s JOLTS job openings.
Fedspeak and the FOMC minutes
Fedspeak and the FOMC minutes will be highlights this week after the “gradualist” tone from Chairman Powell in Friday’s speech set the stage for steady policy near term.
There are several Fed speakers this week, but none are voters. Hawk Kaplan will be in Beijing and will be speaking Monday, The dove Kashkari will do another moderated Q&A Thursday. Rosengren, Bullard, and Kaplan will also be on the wires on Friday the 13th. The FOMC minutes of Powell’s first meeting in March as Chairman could be interesting.
Earnings season kicks off again from Thursday – Fastenal and BlackRock and then a rash of financial firms — Citigroup, First Republic Bank, Infosys, JP Morgan Chase, PNC Financial, Wells Fargo on Friday. Expectations are for strong results, and possible upside potential as the S&P 500 and the DJIA30 ended the week close to their 200-day moving averages.
Canada Market Overview
The calendar is headlined by the BoC’s Q1 Business Outlook Survey (Monday), expected to reveal some slippage in business sentiment, a tighter capacity backdrop, increased labour shortages but still well-contained inflation expectations. In other words, the report will be supportive of no change in the 1.25% rate setting next week.
Housing starts (Monday) are projected to fall to 220.0k in March from 229.7k in February. Building permit values are expected to dip 1.0% in February after the 5.6% bounce in January. The new housing price index is seen falling 0.1% in February after the flat reading in January.
Teranet/National HPI for March is due Thursday. Existing home sales (Friday) close out the week, with a 3.0% m/m decline anticipated, as the rate of contraction moderates after the -6.5% fall in February and record 14.5% plunge in January.
Europe Market Drivers
Light calendar with mainly final inflation data for March, which is unlikely to hold major surprises. Expect HICP rates to be confirmed at 1.7% for France (Thursday), 1.1% for Italy (Thursday), 1.5% for German HICP (Friday) and 1.3% for Spain (Friday), which should leave the Eurozone HICP (due the following week) at 1.4% y/y, up from 1.2% y/y in February.
German trade data for February (Monday), as well as Eurozone trade which could well attract more interest than usual amid the ongoing trade tensions. Expectations are for a slight rise in German exports of 0.2% m/m, after the -0.5% m/m drop in January.
ECBspeak will be closely monitored. Officials are likely to continue to strike a balance with hawkish comments from Weidmann (Thursday) countered by softer tones from other central bankers scheduled to speak, including Draghi(Wednesday) and Constancio (Monday).
The ECB also publishes the minutes of the March policy meeting, when the central bank decided to finally remove the easing bias on rates from the policy guidance.
Japan Market Outlook
The February current account surplus (Monday) is expected to widen to JPY 2,000 bln from 607.4 bln previously. March consumer confidence (Monday) is seen improving to 44.6 from 44.3. February machine orders (Wednesday) are penciled in at down 4.0% m/m from up 8.2%, while March PPI is forecast to slip to 1.9% y/y from 2.5%.
The impact of the firmer JPY on inflation was likely offset by firmer crude oil prices. March bank loan figures are due Wednesday and finally, a speech for the BOJ’s Kuroda is set for Thursday.
UK Fundamental Events
Fundamental leads have been blurred by inclement weather in the last data month, which largely accounted for the big misses in last week’s March PMI survey outcomes. The calendar this week kicks off with the BRC retail sales report for March (Monday), with expectations of a 0.1% headline decline in the same-store figure.
Industrial production for February is also up (Wednesday), with expectations of rises of 0.4% m/m and 2.9% y/y. respectively). Trade data for February is also due (also Wednesday), where forecasts are for a GBP 11.9 deficit in the visible goods balance.
China Market Drivers
Release March loan growth and new yuan loans (likely Tuesday), with the former seen at an unchanged 12.8% y/y rate, and the latter at CNY 1,000 bln from 839.3 bln previously. March CPI (Wednesday) likely slipped to a 2.5% y/y pace after almost doubling to 2.9% in February from 1.5% in January.
March PPI (Wednesday) is forecast at 3.3% y/y from 3.7%. The March trade report (Friday) will be of interest given all the fuss over trade and tariffs, though it won’t show any real effects. It should reveal a narrowed surplus of $29.0 bln from $33.7 bln in February.
Reserve Bank of Australia Governor Lowe speaks (Wednesday) on “Regional Variation in a National Economy.” The Financial Stability Review is due Friday. Economic data is thin this week, but has housing investment (Thursday), expected to dip 0.5% in February after the 1.1% decline in January.
This article about 9-13 April Weekly Forex Market Forecast was written by Stuart Cowell, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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