The Week Ahead: Q1 GDP, Inflation, and the BoJ in the Spotlight

On the Macro

It’s a particularly busy week ahead on the economic calendar.

For the Dollar:

On Tuesday, Consumer confidence figures kickstart the week for the greenback. A fall below 100 would move the dial, with views on the labor market, income prospects, and buying intentions likely focal points.

Core durable goods orders will draw interest on Wednesday ahead of Q1 GDP and jobless claims figures on Thursday. Both sets of numbers will likely influence sentiment toward Fed monetary policy.

However, core PCE price index figures on Friday could prove pivotal. Sticky inflation would cement a May interest rate hike and push bets on a June move.

Other stats from the week include housing sector data, personal spending, finalized consumer sentiment, and Chicago PMI numbers. However, we don’t expect these indicators to influence.

The Week Ahead For the EUR:

The week ahead is a busy one for the EUR.

The German economy will be in the spotlight in the first half of the week, with business and consumer sentiment figures in focus.

Investors will then have to wait until Friday for a euro area data dump.

French, German, and euro area GDP numbers for Q1 and prelim April inflation numbers for France, Germany, and Spain will move the dial.

Other stats include German unemployment, which should have a limited impact on the EUR.

While there are plenty of stats for investors to digest, ECB chatter will also move the dial. ECB President Christine Lagarde (Fri) and ECB Executive Board members Fabio Panetta (Mon), Andrea Enria (Tue & Wed), Luis de Guindos (Wed), and Anneli Tuominen (Wed) will deliver speeches.

It may come down to the GDP and inflation figures on Friday, with sticky core inflation putting a 50-basis point ECB interest rate hike on the table.

For the Pound:

It is a quiet week ahead for the Pound. CBI industrial trend orders (Tue) and house price data (Fri) will leave the Pound in the hands of market risk sentiment, BoE commentary, and UK politics.

The UK local elections will take place on May 4, with the polls likely to signal a swing toward the Labour Party. We expect the Pound to reflect sentiment toward the election.

Monetary Policy Committee member Ben Broadbent will be in the spotlight on Tuesday. Delivering a speech on Monetary Policy: Prices versus Volumes, views on inflation, the UK economy, and monetary policy will influence.

The Week Ahead For the Loonie:

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

Wholesale and manufacturing sales figures will draw interest on Monday and Wednesday. However, GDP numbers for February will garner greater interest on Friday.

After the Bank of Canada’s decision to stand pat on interest rates, hotter-than-expected GDP numbers could title expectations in favor of a June hike.

Crude oil prices and market risk sentiment will influence ahead of the GDP numbers.

Out of Asia – The Week Ahead

For the Aussie Dollar:

It is a relatively busy week ahead for the Aussie Dollar, with inflation in focus.

On Wednesday, Q1 consumer inflation figures will move the dial ahead of wholesale inflation numbers on Friday. Both sets of numbers will influence the RBA on interest rates, with an acceleration in the annual inflation rate likely to raise bets on a May hike.

After the RBA’s April decision to stand pat on interest rates, RBA Governor Philip Lowe warned that a rate pause does not translate into an end to monetary policy tightening.

For the Kiwi Dollar:

For the Kiwi Dollar, it is a quiet week. However, trade data (Wed) will provide direction to the Kiwi, with business confidence numbers on Thursday also of interest.

While the numbers will draw interest, the stats may not shift sentiment toward the RBNZ following the latest CPI numbers.

For the Japanese Yen:

It is a busy week ahead for the Japanese Yen. However, investors will have to wait until Friday for the stats.

Tokyo inflation, industrial production, and retail sales figures will be in focus. While the stats will influence, the Bank of Japan’s interest rate decision and outlook report will be the focal point on Friday.

The Bank of Japan has continued to beat the ultra-loose monetary policy drum. A shift in forward guidance would drive demand for the Yen.

Out of China

It is a quiet week ahead, with no economic indicators for investors to consider. The lack of stats will leave geopolitics in focus.

The Week Ahead – Geopolitics

The war in Ukraine and China-Russia relations will remain the focal point in the week ahead, with Taiwan also an area of interest.