Earnings report in a busy week!
Doubts, after ending the war in Kyiv, and increasing fears in Eastern states of Ukraine in line with the Election in France, increasing the level of uncertainty in financial markets, while it is going to be a huge data week with several central bank meetings, and ECB in focus. At the same time, the Q1 earnings season starts this week with the major Wall Street Banks.
Chinese Inflation - Monday
After a few months of optimism, with slowly increasing the producer inflation and the latest covid-19 outbreak, and the consequence of the strict lockdown in Shanghai, we are expecting to have weaker data to confirm that both producer and consumer inflation are increasing. Expected data are supposed to put a bit more pressure on the Chinese Yuan.
British data- Monday
It is a very busy week for the British economy. The first round of these important data will be released on Monday. GDP, Construction Output, Trade Balance, and Manufacturing production numbers will publish on Monday with mostly declining estimates. These weaker-than-expected numbers should be a negative signal for British Footsie.
US inflation - Tuesday
Nothing will be more noteworthy than US inflation numbers on Tuesday, with expected another increase to 8.4% in March numbers, from 8% in February. With food, energy, and services prices picking up, the future of US inflation is not bright. If we exclude the Food and energy which tend to be volatile, Core CPI is expected to rise by 6.6% year-over-year. Since data increases faster rate hikes possibilities, it should lift the US Dollar Index as well.
RBNZ meeting - Wednesday
After the Reserve bank of Australia, it is the New Zealand Turn to heat the banking meetings, even if it is not going to make any changes in its policies. Since the RBNZ started the hawkish policies much faster compared with other major banks, with uncertainty in the market, committee members of the bank, most probably will decide to hold, which is positive for its stock markets and downtrend for Kiwi.
Bank of Canada - Wednesday
In March meeting Bank of Canada increased the rates by 25bp. As I mentioned in the March meeting, unlike other major economies, the increasing Oil price is positive for the Canadian economy. Therefore, we are expecting the Bank of Canada to lift interest rates at a more aggressive pace with another 25-bp. Loonies should take advantage of it and increase against its crosses.
Second Round of UK data - Wednesday
BRC Retail Sales Monitor, RPI, CPI, and PPI numbers are due to publish on Wednesday with CPI expected at 6.7%, PPI at 10.6%, and RPI at 8.4%. Estimated numbers will likely confirm that British inflation is at its 3 decades high to put more pressure on the London stock exchange and British Pound.
European Central Bank meeting - Thursday
As you know, recently, IMF and many other economic institutes, lowered their Eurozone GDP forecast. And now, overall expected economic growth is modestly over 3% this year. At the same time, inflation is increasing sharply, putting more and more pressure on ECB to change its policy and stop the rising prices, while economic growth is the concern of many others. For now, I do not expect the interest rate to change in this meeting but, do expect ECB policymakers to taper their asset purchases. It should support the Euro in the short term.
Earning Reports - First week
The first-quarter earnings season will kick off this week with banking reports at the center of the stage. JP Morgan and Delta Airlines will report on Wednesday, United Health Group, Wells Fargo, Morgan Stanley, Goldman Sachs, and Citigroup also on Thursday.
