Key Events include rate decisions from RBA, BoE, Banxico, BCB, Riksbank, ECB Minutes, BoJ Summary of Opinions, Canada jobs report, China Trade, UK GDP, and Norwegian CPI.
Monday – May 06
Key Events on watch
US
- 10:00 AM Employment Trends for April
- 12:50 PM Fed’s Barkin Speaks on Economic Outlook
- 1:00 PM Fed’s Williams Participates in Fireside Chat
- 2:00 PM Senior Loan Officer Opinion Survey on Bank Lending Practices
Earnings
- Tyson Foods (TSN),
- Vertex Pharmaceuticals (VRTX),
- Palantir (PLTR),
- Realty Income (O)
Global
- UK Bank Holiday;
- EZ Final Composite & Services PMIs (Apr),
- Sentix (May)
- Producer Prices (Mar).
- China Caixin Services PMI
- Eurozone PPI
Tuesday – May 07
RBA Policy Decision
The RBA is expected to maintain the Cash Rate at 4.35%, despite the possibility of a shock rate hike. The Q1 CPI figures surpassed expectations, pushing back expectations for the first rate cut to Q2 2025.
Key Events on watch
US
- 7:45 AM ICSC Weekly Retail Sales
- 8:55 AM Johnson/Redbook Weekly Sales
- 11:30 AM Fed’s Kashkari Participates in Fireside Chat
- 1:00 PM U.S. Treasury to sell $58B in 3-year notes.
- 3:00 PM Consumer Credit for March
- 4:30 PM API Weekly Inventory Data
Earnings
- Disney (DIS), McKesson (MCK), Ferrari (RACE), GlobalFoundries (GFS), Coupang (CPNG), Electronic Arts (EA), Rivian Automotive (RIVN) Datadog (DDOG)
Global
- RBA Policy Decision
- Switzerland Unemployment Rate
- Eurozone Retail Sales
- EIA STEO,
- German Trade Balance (Mar),
- EZ Construction PMI (Apr).
Wednesday – May 08
Riksbank announcement
The Riksbank announced in March that it may cut the policy rate in May or June if inflation remains favorable. However, recent hawkish market repricing and the depreciation of the SEK have muddied this view. Expectations are skewed towards a May cut due to inflation developments and the ECB’s easing plans in June. A firm call on a firm easing cycle is yet to be made.
BCB announcement
The BCB announced that analysts predict a Selic rate of 9.5% by the end of this year and further cuts to 9.0% by 2025. JPMorgan predicts a Selic of 10.00% by the end of this year, with three 25bps rate cuts. The bank adjusts its policy rate path to account for global financial tightening and the government’s reduction of the 2025 primary target.
Key Events on watch
US
- 7:00 AM MBA Mortgage Applications Data
- 10:00 AM Wholesale Inventory M/M for March
- 10:30 AM Weekly DOE Inventory Data
- 1:30 PM Fed’s Cook Speaks on Financial Stability
Earnings
- Uber Technologies (UBER), Anheuser-Busch InBev (BUD), Airbnb (ABNB), Shopify (SHOP), Arm (ARM), Energy Transfer (ET), Trade Desk (TTD), Beyond Meat (BYND), Affirm (AFRM), AMC Entertainment (AMC).
Global
- Norges Bank H1 Financial Stability Report,
- Riksbank Announcement,
- BCB Announcement;
- German Industrial Output (Mar),
- Italian Retail Sales (Mar).
Thursday – May 09
Japan Average Cash Earnings
The Japanese Average Cash Earnings are expected to rise to 1.5% Y/Y, with the BoJ aiming for an inflation target. A rate hike is uncertain, with July and October being potential timings. Governor Ueda plans to reduce JGB purchases.
BoE Policy Decision
The BoE is expected to maintain interest rates at 5.25%, despite moderate inflation and high unemployment rates. The labour market saw job losses and wage growth. The vote split at the last meeting changed, with the first rate cut expected in September. Major changes are unlikely.
Chinese trade balance
In March, the Chinese trade balance was surplus, with exports at -7.5% Y/Y and imports at -1.9% Y/Y. Exports declined due to a high base effect and seasonality. Future export growth is likely to be challenged by stable export prices and the yuan’s appreciation. Imports also declined, but economists expect a rebound due to fiscal stimulus.
Banxico Announcement
Banxico’s Deputy Governor Heath predicts longer rates hold due to services inflation needing a downward trend. He expects 2-4 rate reductions in six remaining confabs this year, dependent on year-end inflation target. Heath believes decisions will be influenced by the Fed, but is more concerned about domestic inflation pressures.
US Jobless Claims
US Jobless Claims are crucial weekly indicators of the labor market’s state, as a weakening market is more likely to lead to disinflation. Initial Claims are expected to be 210K this week, while Continuing Claims remain stable at 1800K.
Key Events on watch
USA
- 8:30 AM Weekly Jobless Claims
- 8:30 AM Continuing Claims
- 10:30 AM Weekly EIA Natural Gas Inventory Data
- 1:00 PM US Treasury to sell $22B in 30-year notes.
Earnings
- Warner Bros. Discovery (WBD), US Foods (USFD), Hyatt Hotels (H), Roblox (RBLX), Dropbox (DBX), Genpact (G)
Global
- Japan Average Cash Earnings,
- BoJ Summary of Opinions,
- BoE Policy Decision,
- US Jobless Claims.
- BoE Announcement & May MPR,
- NBP Policy Announcement,
- Banxico Policy Announcement;
- Chinese Trade Balance (Apr).
Friday – May 10
Canada Jobs report
The Canadian labour market report predicts 17.5K jobs added in April, with a higher unemployment rate of 6.2%. Job losses and wage growth increased, but the BoC is concerned about a looser labour market. The market expects a rate cut in June.
ECB Minutes
The European Central Bank (ECB) has reaffirmed its guidance on rates, stating that rates will remain sufficiently restrictive for a long time. The bank did not pre-commit to a specific rate path but suggested that if inflation continues to rise, it would be appropriate to reduce monetary policy restrictions. The updated guidance was seen as a green light for a rate cut at the next meeting. President Lagarde reiterated that the central bank will have more data by the time of the June meeting. Some policymakers are looking for cuts in June and July amid a benign labour market.
UK GDP
UK GDP is expected to show modest expansion in March, following a strong 0.3% reading in January. This suggests the UK is likely to bounce out of its technical recession. Q1 growth is forecasted at around 0.4% Q/Q. The data could help PM Sunak shift media narratives.
Norwegian CPI
The Norwegian Central Bank (SEB) expects inflation to fall below the Norges Bank’s forecast, despite a hawkish-twist in the May MPU. The bank is looking for two 25bps cuts in 2024 and is likely to adjust its CPI-ATE views at its June MPR.
Key Events on watch
USA
- 10:00 AM University of Michigan Confidence, Prelim-May
- 10:00 AM University of Michigan 1-yr and 5-yr inflation expectations (3.2% and 3% prior respectively)
- 12:45 PM Fed’s Goolsbee Speaks in Moderated Q&A
- 1:00 PM Baker Hughes Weekly rig count data
- 2:00 PM Federal budget for April
Earnings
AMC Networks (AMCX), Enbridge (ENB).
Global
- New Zealand Manufacturing PMI
- UK GDP
- Canada Jobs report
- US University of Michigan Consumer Sentiment survey
- ECB Minutes;
- Japanese Current Account (Mar),
- Norwegian CPI (Apr),
- China M2 (Apr).
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