Weekly Market Preview –  May 1 to 7

calendar
Good Morning;
a look at the Week ahead:
With geopolitical events having dominated much of the economic conversation in recent weeks, a blockbuster week of scheduled data and central bank meetings should  be a welcome distraction for global markets.
The AUD has opened the week against the USD around 0.7472 and it won’t be long before attention turns to Tuesday’s RBA interest rate decision. We are anticipating that the RBA will keep interest rates on hold at this meeting with relatively soft recent economic data and inflation in particular sluggish. The RBA statement as always will be interesting to examine with the Australian housing market grabbing much attention with some reports over the weekend suggesting  flat prices or even a slight decline in Sydney recently. This would be welcomed by the RBA whilst softer commodity prices will also likely be noted with their impact on the AUD performance in recent weeks as well. Trade balance data will also be released in Australia on Thursday and this will be followed by a speech by RBA Governor Lowe at an Economic Society event iin Brisbane.
New Zealand employment data on Wednesday will be a key release across the Tasman this week with commodity price data following on Thursday. The nation’s dairy industry will also be looking for a continued resurgence in dairy prices at this week’s GlobalDairyTrade Auction. There has been three consecutive increases in the auction results since mid-March following a fall prior to that time.
It will be an enormous week of US data as well as the the highly anticipated Federal Reserve FOMC meeting. Following the interest rate rise at the March meeting it is unlikely that there will be a rise at this week’s meeting with recent data suggesting that it will be unlikely to occur. Weaker than expected GDP growth of 0.7% in the first quarter of 2017 suggests that the traget of 3% + will be a big challenge for the Trump administration. This result was down from 2.1% iin the fourth quarter of 2016. With tax cuts the main vehicle proposed by the White House to stimulate the US economy only time will tell if this will help achieve the desired growth trajectory, let alone pay for themselves. The Fed’s preferred price measurment data – Personal Consumption Expenditure Price Index – is released on Monday following a speech by Treasury Secretary Mnuchin. Non-Farm payroll data will also be eagerly anticipated late this week following the softer than expected reult last month.
Brexit is comntinuing to dominate the British economic spectrum with the UK and EU at loggerheads as to the “hardness” of the divorce although it is fair to say that this is not at all unexpected. We can expect constant to-ing and fro-ing to continue with the upcoming British general election only serving to add further spice to the situation. Following a bank holiday to start the week manufacturing, coinstruction and services PMI data will be released across the week with mortgage approval data also of note.
Manufacturing data form the eurozone and its major economies will be released on Tuesday following Monday’s bank holiday with unemployment data also due for release. Services and retail PMI and retail sales data for the eurozone close out the week’s data whilst ECB President Draghi will speak on Friday. The upcoming French Presidential Election will also likely dominate the week’s news ahead of Sunday’s poll.
Chinese Manufacturing and Non-Manufacturing PMI data was released over the weekend with both indices showing positive perfomance albeit below market expectations. The Caixin Manufacturing and Services PMI data will also be released during the upcoming week in what is an otherwise quiet Chinese datat week. No doubt the lingering North Asian tensions will likel;y see China remain in the forefront of the news with impact on global markets resulting.
Regards All.
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