The Week Ahead – Central Banks, Private Sector PMIs, and US Jobs in Focus

On the Macro

It’s a big week ahead on the economic calendar. The RBA, the Fed, and the ECB deliver policy decisions, with the private sector, the US Jobs Report, and Euro Area inflation also in focus.

For the Dollar:

ISM Manufacturing PMI numbers for April kickstart the week. While the headline figure will influence, investors should consider the employment and prices sub-components.

On Tuesday, JOLTs job openings will draw interest ahead of ADP nonfarm employment change and ISM Non-Manufacturing numbers on Wednesday.

Both numbers will influence as investors consider the Fed interest rate decision late in the Wednesday session.

On Thursday, jobless claims will provide direction ahead of the US Jobs Report on Friday.

While the stats will move the dial, the Fed interest rate decision will be the main event. The markets expect a 25-basis point interest rate hike. Barring a surprise Fed decision to hit the pause button, forward guidance will likely be the focal point.

Other stats include factory orders, trade data, unit labor costs, and nonfarm productivity numbers that should have a limited impact on the dollar.

For the EUR:

It’s also a busy week for the EUR.

German retail sales, Eurozone member states and Eurozone manufacturing PMIs, and euro area inflation will be in focus.

Barring revisions to prelim numbers for Germany, we expect Italy and the Eurozone’s PMIs and euro area inflation to have more influence.

On Thursday, the focus will shift to the services sector and the ECB monetary policy decision. There is uncertainty over whether the ECB will deliver a 25-basis point or 50-basis point interest rate hike. Euro area core inflation could dictate the ECB move.

However, the ECB press conference will also move the dial. The ECB’s outlook on inflation, the economy, and monetary policy will likely be the focal points.

On Friday, German factory orders and euro area retail sales wrap up a busy week.

The Week Ahead For the Pound:

It is a quieter week ahead for the Pound. Finalized private sector PMIs will provide direction on Tuesday and Thursday. We expect revisions to the Services PMI to have more influence.

With the Bank of England in focus the following week, Monetary Policy Committee member commentary also needs consideration.

On Thursday, BoE Governor David Bailey is on the calendar to deliver a speech at the Building Societies Annual Conference.

For the Loonie:

It is a relatively quiet week ahead on the economic calendar for the Loonie.

Trade data and the Ivey PMI for April will draw interest on Thursday, with trade data likely to have more influence.

However, employment numbers on Friday will likely garner more interest.

Out of Asia

The Week Ahead For the Aussie Dollar:

It is a big week ahead for the Aussie Dollar, with the RBA in action on Tuesday. Softer March inflation numbers eased bets of another interest rate hike. However, RBA Governor warned that the April pause did not mean an end to the monetary policy tightening cycle. Economists forecast the RBA to stand pat on Tuesday.

On Wednesday, retail sales figures will draw interest ahead of trade data on Thursday.

The RBA Monetary Policy Statement wraps things up on Friday.

For the Kiwi Dollar:

For the Kiwi Dollar, it is a busier week. Employment figures for Q1 will draw interest on Thursday. Weak economic indicators suggest an RBNZ near-term hold, pressuring the Kiwi, which should limit the impact of the numbers on the NZD/USD pair.

However, the RBNZ Financial Stability Report will move the dial on Wednesday.

The Week Ahead For the Japanese Yen:

It is a quiet week for the Japanese Yen. There are no economic indicators from Japan for investors to consider.

Out of China

It is a quiet week ahead. However, private-sector PMIs will influence market risk sentiment. The Caixin Manufacturing and Services PMIs will move the dial.

On Sunday, the NBS Manufacturing PMI fell from 51.9 to 49.2, with the Non-Manufacturing PMI down from 58.2 to 56.4. Economists forecast PMIs of 51.4 and 58.3, respectively.

Geopolitics

The war in Ukraine and China-Russia relations will remain the focal point, with Taiwan also an area of interest. After comments relating to Alibaba, Huawei, and national security, US-China relations will also be a focal point.