Main Macro Events This Week

• United States: The US markets will monitor earnings announcements, which get into full swing this week and will fill an otherwise light economic calendar. The April NAHB homebuilder sentiment index opens the week (Today) and is forecast to inch up to 59 after holding at 58 in February and March, from 61 in January. Housing starts for March (Tuesday) should rise 0.6% to a 1.185 mln unit pace following the 5.2% February rebound to 1.178 mln. March existing home sales (Wednesday) are forecast jumping 4.3% to a 5.30 mln clip in March after dropping 7.1% to 5.08 mln in February. The February FHFA home price index (Thursday) should rise to 231.0 after gains of 0.5% over the prior four months. The April Philly Fed manufacturing index is forecast falling 4 points to 8.0 after surging an outsized 15.2 points to 12.4 in March. That was the highest level since December 2014. The April flash Markit PMI is due (Friday). Initial jobless claims for the week ended April 16 are seen slipping to 252k after dropping 13k to 253k in the prior week (the lowest since 1973). This week’s figure will be important since it coincides with the BLS job survey week. It should reinforce signs of ongoing strength in the labor market. Fedspeak is very light, and all on Monday, before the pre-FOMC blackout period begins.

• Canada: The economic data will finalize the February GDP projection. We expect wholesale trade shipments (Wednesday) to tumble 1.0% in February after the flat reading in January. Retail sales (Friday) are anticipated to fall 0.8% in February after the 2.1% surge in January while the ex-autos aggregate drops 1.0% in February on the heels of the 1.2% gain in January. CPI rounds out the week, with a slowing to a 1.1% y/y growth rate in March seen from the 1.4% pace in February. The Bank of Canada’s core CPI is expected to moderate to a 1.8% clip in March from 1.9% in February. There is nothing from the Bank of Canada this week.

• Europe: The focus is squarely on the ECB meeting (Thursday), although central bank officials have made pretty clear that for now the focus is on the implementation of the easing package from March and that no further action is on the table for now. Data releases this week focus on the first round of confidence data for April in the form of the German ZEW and preliminary PMI readings. The calendar also includes national French business confidence, as well as German PPI, Eurozone current account as well as the preliminary reading of Eurozone consumer confidence, although market impact here is likely to be limited. Germany sells 10 year Bunds (Wednesday). The event calendar also has Eurogroup and Ecofin meetings with markets likely to hope for comments on Greece at the former and possible Brexit implications at the latter.

• UK: Brexit risk continues to overshadow proceedings. The calendar this week is highlighted by labour data (Wednesday), official retail sales data (Thursday) and government borrowing figures (also Thursday). We expect the labour data to see the headline claimant count fall by 12k in March and the unemployment rate remain unchanged at 5.1% in February. Retail sales are seen ebbing 0.1% m/m, which would translate to a 4.4% gain in the y/y comparison.

•  China: There are no scheduled economic releases this week.

• Japan: The March trade report is due on Wednesday, where the surplus is expected to widen to JPY 750.0 bln from February’s JPY 242.2 bln. The February tertiary index (Friday) is seen falling 1.0% m/m versus the 1.5% increase previously.

• Australia: The minutes to the Reserve Bank of Australia’s April 5 meeting will be released (Tuesday). The Bank left the target rate unchanged at 2.0%, as expected. The last policy action was a 25 bp cut in May 2015. Employment picked up in March, while the unemployment rate dipped to 5.7%, after dropping to 5.8% in February. But the stronger AUD and uncertainties over Chinese and EM growth have been headwinds to more robust growth, and that’s keeping policymakers on guard. RBA Governor Stevens (Tuesday) delivers a speech. The economic data calendar is thin this week, with no top tier releases scheduled.

Janne Muta

Chief Market Analyst

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