Main Macro Events This Week

• United States: It will be a busy week ahead in the US and upcoming data could have significant implications for the Fed and the policy outlook. The March jobs report highlights and expectations points to a 200k rise, with a steady 4.9% unemployment rate. The economic calendar kicks off with personal income report (Monday), seen rising a mild 0.1% in February vs 0.5% in January; PCE prices may sink 0.2% on the month. The advance trade deficit may hold steady near -$62.6 bln in February, while NAR pending home sales are expected to rise to 106.5 in February from 106.0 and the Dallas Fed index may rebound to -20 for March from -31.8. The Case-Shiller report on home price index (Tuesday) may tick down to 182.9 in January from 182.8. Also, consumer confidence is forecast to rise to 93.0 in March (median 93.7) vs 92.2, despite headwinds from market and energy price volatility. MBA mortgage applications are due (Wednesday), along with the ADP employment survey set to rise 180k in March (median 190k) vs 214k. EIA energy inventories rose sharply with API last week and will be closely monitored again after denting crude oil. Initial jobless claims (Thursday) are estimated to rise 13k to 278k, while Chicago PMI may bounce to 49.0 in March (median 49.5) vs 47.6. In addition to the jobs report (Friday), construction spending is seen flat in February, final Michigan sentiment is due for March, ISM may nudge up to 50.0 in March (median 50.6) vs 49.5 and auto sales are on tap over the course of the session.

• Canada:  January GDP report (Thursday) takes top billing this week, with growth expected to expand 0.2% in January compared to December, extending the run of monthly gains to four straight. GDP grew 0.2% in December after an 0.3% gain in November and 0.1% rise in October. A firm showing for January GDP would put real Q1 GDP on track. The industrial product price index (Tuesday) is seen dipping 0.1% m/m in February on a not seasonally adjusted basis following the 0.5% bounce in January. The raw materials price index is projected to fall 0.5% on a not seasonally adjusted basis after the 0.4% decline in January. January average weekly earnings (Thursday) are anticipated to gain 0.3% m/m following the 0.9% surge in December. The earnings figures are part of the establishment survey, which also contains an employment estimate. Employment grew 36.1k in December after the 13.0k rise in November. The much more timely labour force survey saw a 2.3k drop in February and 5.7k dip in January after the 22.8k gain in December, suggestive of a dip in the establishment survey’s employment measure during January.

• Europe: This week’s data releases focus on preliminary inflation numbers for March. The German HICP rate (Wednesday) is expected to rise to -0.1% y/y (median same) from -0.2% y/y, and an increase in the French HICP rate (Thursday) to 0.0% y/y (med same) from -0.1% y/y, which should see the overall Eurozone number (Thursday), rising to -0.1% y/y (med same) from -0.2%. Core inflation is also expected to tick marginally higher. The calendar also has the last key confidence numbers for March – the EU Commission’s ESI Economic Sentiment Indicator (Wednesday), which after the better than expected PMI and IFO readings is seen rising to 103.9 (med 103.5) from 103.8. PMI readings still continue to point to modest expansion in overall Eurozone economic activity and this is also underpinning labour markets, although the pace of the decline is starting to wane. For now though the improving trend continues and we expect a renewed dip in the German (sa) jobless number of -3K (med -5K) in March, which should leave the jobless rate steady at a very low 6.2%. The overall Eurozone rate for February meanwhile is seen falling to 10.2% (med same) from 10.3%.

• UK: This week brings March Gfk consumer sentiment (Wednesday), the third and final estimate of Q4 GDP (Thursday), Q4 current account data (Thursday), monthly BoE lending data (also Thursday), and the March Markit manufacturing PMI survey (Friday). Consumer sentiment is expected to ebb to -1 from 0 (median same), reflecting a recent ebb in economic momentum and sudden rise in Brexit risk. Q4 GDP is expected to come in unrevised at 0.5% q/q and 1.9% y/y (median same). February lending data is expected to show mortgage approvals dip to 73.5k from 74.6k, and consumer lending dipping to GBP 1.3 bln after a strong GBP 1.6 bln reading in the month prior. The manufacturing PMI release is expected at 51.2, which would signal a steadying in activity after the sharp drop in a 50.8 cycle low in the month before.

• CHINA:  February leading indicators are due during the week.

• JAPAN: Most of the data comes on Tuesday, with February unemployment expected steady at 3.2%.  February personal income is due, along with February PCE, which likely fell 2.0% y/y as compared to January’s -3.1% reading. February retail sales are forecast to have risen 1.5% y/y from the prior 0.9% increase for large retailers, and up 0.3% from -0.1% for total sales. Wednesday brings preliminary February industrial production, where we expect a 5.0% y/y drop, versus the 3.7% gain in January. February housing starts (Thursday) are penciled in at -3.0% y/y from the 0.2% January increase. February construction orders are also due Thursday. On Friday, the March Tankan index is estimated to have slipped to 8 from 12 for large manufacturers, and 23 from 25 for large non-manufacturers.

• AUSTRALIA: Economic data is lacking in top tier releases, although private sector credit for February (Thursday) is scheduled.

Janne Muta

Chief Market Analyst

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