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Key Events In The Holiday-Shortened Week

In this holiday-shortened week (markets closed for Good Friday), focus turns to several inflation prints in G10 in the week ahead, with US and UK inflation data likely to get the most attention. In addition, there are a few scheduled speaking engagements by Fed officials, including a speech by Fed Chair Yellen on Monday.

Away from the US, the street expects the Bank of Canada to remain on hold, keeping the overnight rate target at 0.5%. Despite recent improvement in some economic data, slack remains in the economy and there is no evidence of demand pressure on prices. More interesting for the markets will be the message that the BoC chooses to send through the combination of the interest rate announcement, the monetary policy report and the press conference.

In Emerging Markets there will be monetary policy meetings in Brazil, Chile, Korea, Kazakhstan and Ukraine. Brazil´s BCB is expected to cut the selic rate 100bp. Chile´s BCCH will likely cut the monetary policy rate by 25bp.

In other data

  • In the US, after a softer than expected payrolls report, attention turns to inflation and retail sales. Chair Yellen will also be speaking on Monday.
  • In the Eurozone, quiet week with industrial production, the German ZEW and final CPI. Two (and four) weeks to go to French elections.
  • In the UK, focus will be on inflation and the labor market report. BOE Governor Carney is also speaking at a Fintech conference alongside Chancellor Philip Hammond.
  • In Japan, we get trade balance, PPI, machine orders, money supply and governor Kuroda speaking at a BoJ event.
  • In Australia, focus will be on the labor market report, while the RBA also releases its half-yearly Financial Stability Review. We also get housing financing and business and consumer sentiment surveys.

A daily breakdown of key events from DB's Jim Reid

This morning in Europe the only data of note is the Bank of France business sentiment reading and Sentix investor confidence reading for the Euro area. Over in the US the sole release is the labour market conditions index reading for March.

Tuesday kicks off in the UK where we will get the March CPI/RPI/PPI data docket, while Euro area industrial production for February and the April ZEW survey for the Euro area will also be closely watched. Over in the US tomorrow data includes the NFIB small business optimism reading for March and JOLTS job openings in February.

Japan gets things going on Wednesday where PPI and machine orders data is due out, while shortly after we’ll get the March CPI and PPI prints in China. During the European session the focus is likely to be on the UK again with the February and March employment indicators due out. In the US the only data is the March import price index and March monthly budget statement.

Thursday looks set to be an important morning for data in China with the March trade numbers due out. In Europe we are due to do get CPI reports in Germany and France along with the BoE credit conditions and bank liabilities surveys in the UK. In the US the calendar finally picks up with initial jobless claims, March PPI and the preliminary University of Michigan consumer sentiment reading all due.

As a reminder, Friday is Good Friday with equity markets closed in the US and most of Europe (Treasury market shuts at midday too) however there is some important data due in the US still with the March CPI report and also March retail sales data and February business inventories.

Away from the data, the only Fedspeak this week is from Fed Chair Yellen this evening when she is due to speak at the University of Michigan (with Q&A expected) and then Kashkari on Tuesday. Away from that, the IMF is due to release the analytical chapters from its April 2017 World Economic Report today. The ECB’s Constancio is also due to present the ECB’s annual report to an EU parliamentary committee today. With regards to earnings, JP Morgan, Citigroup and Wells Fargo all report on Thursday.

* * *

Finally, here is Goldman's breakdown of key events only in the US, together with consensus expectations:

The key economic releases this week are the CPI and retail sales reports on Friday. In addition, there are a few scheduled speaking engagements by Fed officials, including a speech by Fed Chair Yellen on Monday.

Monday, April 10

  • 04:10 PM Fed Chair Yellen (FOMC voter) speaks: Federal Reserve Chair Janet Yellen will participate in a moderated conversation with the Dean of Ford School of Public Policy at the University of Michigan in Ann Arbor. Chair Yellen is expected to take questions from the audience and through Twitter.
  • 07:30 PM St. Louis Fed President James Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will give the opening address at a macro and finance workshop at Monash University in Melbourne, Australia, on the topic of “Optimal Monetary Policy at the Zero Lower Bound.”

Tuesday, April 11

  • 06:00 AM NFIB small business optimism index, March (consensus 104.9, last 105.3)
  • 10:00 AM JOLTS job openings, February (last 5,626)
  • 01:45 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a moderated discussion as a part of a meeting of the Minnesota Business Partnership in Minneapolis. Audience Q&A is expected.

Wednesday, April 12

  • 08:30 AM Import price index, March (consensus -0.2%, last +0.2%): Consensus expects import prices to decline by 0.2% in March (mom nsa). In the February report, the headline index advanced 0.2%, primarily driven by a pickup in the prices of foods, feeds, and beverages.
  • 10:00 AM Atlanta Fed business inflation expectations, April (last +2.0%)
  • 10:00 AM Dallas Fed President Kaplan (FOMC voter) speaks: Dallas Federal Reserve President Robert Kaplan will discuss economic conditions and monetary policy at the annual meeting of the Cornerstone Credit Union League in Fort Worth, Texas.
  • 02:00 PM Monthly budget statement, March (consensus -$167.0bn, last -$108.0bn)

Thursday, April 13

  • 08:30 AM Initial jobless claims, week ended April 8 (GS 250k, consensus 245k, last 234k); Continuing jobless claims, week ended April 1 (consensus 2,024k, last 2,028k): We estimate initial jobless claims rebounded 16k to 250k. Last week’s 25k drop fully reversed the elevated readings of the previous two weeks that we believe reflected the impact of Winter Storm Stella (which hit the US during the week of March 18). However, the current level of jobless claims now appears abnormally low in a few large states such as California and New York, where we see scope for a rebound. Continuing claims – the number of persons receiving benefits through standard programs – have continued to trend down in recent months, suggestive of additional labor market improvement that we expect to continue.
  • 08:30 AM PPI final demand, March (GS -0.1%, consensus flat, last +0.3%); PPI ex-food and energy, March (GS flat, consensus +0.2%, last +0.3%); PPI ex-food, energy, and trade, March (GS +0.2%, consensus +0.2%, last +0.3%): We estimate that headline PPI declined 0.1% in March, reflecting lower energy prices. We estimate PPI ex-food, energy and trade services rose by 0.2%. Producer prices rose by 0.3% in February, supported by firming prices of energy and food. The PPI excluding food and energy was also firmer than expected, increasing by 0.3% following +0.4% in January.
  • 10:00 AM University of Michigan consumer sentiment, April preliminary (GS 96.0, consensus 96.5, last 96.9): We estimate the University of Michigan consumer sentiment index declined 0.9pt to 96.0 in April, after pulling back 0.7pt in the March final reading (relative to the preliminary measure from the first half of the month). Our forecast reflects some sequential softness in higher frequency consumer surveys as well as an expected drag from the late-March stock market sell-off. Given the April rebound in gas prices, we also note the possibility of a further rebound in the report’s measure of 5- to 10-year ahead inflation expectations, which rose to 2.4% in last month’s final reading from a record low 2.2% in the preliminary report.

Friday, April 14

  • US equity and bond markets will be closed in observance of Good Friday.;
  • 08:30 AM CPI (mom), March (GS flat, consensus flat, last +0.1%); Core CPI (mom), March (GS +0.15%, consensus +0.2%, last +0.2%); CPI (yoy), March (GS +2.7%, consensus +2.6%, last +2.7%);
    Core CPI (yoy), March (GS +2.3%, consensus +2.3%, last +2.2%): We expect a below-trend increase in core CPI in the March report, reflecting a second monthly decline in the communications category related to the release of Verizon unlimited data plans. We also expect colder and snowier weather (sa) to weigh on apparel prices, particularly for early-spring merchandise. Additionally, we note the possibility of a drop in airfares given the combination of their sharp recent improvement and the March decline in oil prices. Offsetting these negative factors, we expect second-derivative improvement in used car price inflation. Our estimate of 0.15% (mom) for core CPI would result in the year-over-year rate accelerating a tenth to 2.3%. We expect a decline in seasonally adjusted energy prices to weigh on headline CPI, where we estimate a flat month-to-month reading, though we expect the year-over-year rate to remain stable at 2.7%.
  • 08:30 AM Retail sales, March (GS -0.5%, consensus -0.1%, last +0.1%); Retail sales ex-auto, March (GS -0.2%, consensus +0.1%, last +0.2%); Retail sales ex-auto & gas, March (GS +0.1%, consensus +0.3%, last +0.2%); Core retail sales, March (GS +0.3%, consensus +0.3%, last +0.1%): Following significant delays in February, tax refund distributions had converged close to normal seasonal levels by the first week of March, a few weeks after the legal deadline constraining the IRS had passed. While this would suggest a sharp reacceleration in March spending activity, industry sources suggest the sequential improvement was fairly muted. Additionally, Winter Storm Stella – which impacted the Midwest and East Coast in the middle of the month – seems likely to weigh on sales in the building materials, food service, and mall-based discretionary categories. On the positive side, storm-related preparations seem likely to boost sales in the grocery category; Factoring in these considerations, we estimate the key retail control gauge rose 0.3% (mom) and expect a more muted 0.1% rise in the ex-auto ex-gas component. We also estimate a 0.2% decline in ex-auto sales reflecting the 6% pullback in gas prices (mom sa). We estimate headline retail sales fell even more sharply (-0.5% mom) due to the pullback in auto SAAR in the month.
  • 10:00 AM Business inventories, February (consensus +0.3%, last +0.3%): Consensus expects business inventories to increase 0.3% in February, in line with the pace of growth in January.

Source: BofA; DB, GS