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The Week Ahead

For all that the new week brings plenty of major data, above all from the US and China, and as much as there will be a lot of Fed, ECB and other central bank speakers, it is clear that US/China trade talks remain front and centre for financial markets, with the Brexit impasse also getting an honourable mention, along with renewed tensions in and economic challenges for the Italian governing coalition. The flow of corporate earnings will still be plentiful, but starts to ease off in the US. Govt bond supply picks up in the Eurozone to a total of around EUR 17.0 Bln, mostly from France and Italy, along with an as ever tiny 30 yr sale in Germany, as the UK launches a new 2054 conventional Gilt via a syndicated sale. Oil markets will eminently be keeping a close eye on those US/China trade talks and how China responds to the latest US tariff increase, above all its implications for the global growth outlook and by extension oil demand. But it also has the latest monthly OPEC Oil Market Report to digest, as well as watching for any fall-out and/ or disruption from the Houston Ship Canal closure on Friday (due to a tanker/barge collision), and indeed the major storms on the US Gulf coast over the weekend. It will also be pondering the dispatch of further US military/defence capabilities to the Persian Gulf.

For the US, Retail Sales gets top billing with 0.2% m/m headline expected, following on from March's 1.2% m/m (strongest in 18 months), with weak Auto Sales a drag as reflected in forecasts of 0.7% m/m ex-Autos, with core measures seen 0.3%/0.4% after a jump of 0.9%/1.0% in March. This would represent a break from the sharp swings seen in the prior four months, and suggest that Q2 Personal Consumption should be rather more robust than the rather sluggish 1.2% SAAR seen in Q1. If the array of manufacturing surveys and Orders data are any guide, then Industrial Production is unlikely to better an expected flat m/m following March's 0.1% m/m, with the NY and Philly Fed May manufacturing surveys seen at the lower end of recent ranges at 8.0 and 10.0 respectively. By contrast housing sector data are anticipated to show some improvement, with the NAHB survey eking out a further small gain to 64 from 63, and Housing Starts to pick up 6.2% m/m to 1.209 Mln SAAR, in part seasonal, but also reflecting continued strength in Permits (last 1.269 Mln, exp. 1.290 Mln). Business Inventories and preliminary Michigan Sentiment are also due.

Over in China, the key question is whether this week's data run confirms that the better than expected Q1 GDP & March activity data were a signal that the authorities' stimulus efforts of the past 6 months are getting some traction, above all the huge boost to Total Social Financing. April readings are anticipated to show a reactive correction in Industrial Production to 6.5% y/y, after surging to 8.5% y/y in March, while Retail Sales are expected to ease modestly to 8.6% y/y from 8.7%, though weak Auto Sales (-6.9% y/y) will act as a drag. Fixed Asset Investment should continue to benefit from govt infrastructure spending, and is forecast to edge up to 6.4% y/y from 6.3%. Often overlooked in this monthly 'dump' of activity data is the Surveyed Unemployment Rate, which eased back to 5.2% in March, having spiked up from 4.8% in November to 5.3% in February. But in policy terms (fiscal and/or monetary) the key remains the outcome / evolution of the USA/China trade talks.

In the UK, the March/April labour data follow on from Friday's overall disappointing run of data (above all March GDP -0.1% m/m), given that there will almost inevitably be a sharp payback in Q2 for the Q1 jump in Manufacturing. The Q1 Unemployment Rate is seen unchanged at 3.9%, while Q1 Employment growth is expected to remain robust at 141K (prior 179K), with Average Hourly Earnings expected to ease marginally to 3.4% from 3.5%, and ex-Bonus to 3.3%.  But with the latest REC Employment survey for April suggesting that the labour market 'seized up' in April, any strength in this week's official data will likely represent a near term peak.

A modest week for data in the Eurozone features the preliminary estimate of German Q1 GDP, which is seen bouncing to 0.4% q/q, paced by strength in Construction and Services, but continuing to be hobbled by ongoing weakness in Manufacturing. There are a raft other national Q1 GDP readings in the Euro area and CEE, with Hungary (1.4% q/q) and Poland (1.2% q/q 4.4% y/y) expected to be the stellar performers, while auto sector woes are likely to have dampened growth in the Czech Republic (0.4% q/q), Romania (0.2% q/q) and Slovakia; Norwegian Q1 mainland GDP is expected to echo monthly readings slowing to 0.4% q/q from 0.9%. (1.2% q/q 4.4% y/y). Sweden has CPI which should rebound on headline and core measures due to Easter effects, with headline seen at 0.7% m/m 2.1% y/y (from 1.9% y/y) and CPIF ex-energy at 0.6% m/m 1.6% y/y (from 1.5%), the latter likely to be signalled out as a concern, when Riksbank governor Ingves speaks this week. The German ZEW survey is also due.

Elsewhere, Australia has both Q1 Wages, expected to edge up to 0.6% q/q for an unchanged and subdued 2.3% y/y, and the monthly labour report, which is anticipated to show an unchanged 5.0% Unemployment Rate, and headline Employment growth easing back to a very 'average' 15K, following on from March's full-time jobs (48.3K) led 25.7K. Canada has CPI, which will likely see another energy led 0.4% m/m gain to edge the y/y back up to 2.0%, with core measures also seen around the BoC's 2.0% target, where they have been for the past 15 months. Japan has its Current Account and Economy Watchers (services) Survey, which typically garner little in the way of market reaction. India will look to CPI, WPI and trade data, with CPI expected to edge up to 2.99% y/y, primarily paced by energy prices, with food price inflation very well contained for the time being. Russia publishes a flash estimate of Q1 GDP, which is seen slowing sharply to 1.2% y/y from Q4 2.7%, predicated by the jump in inflation squeezing personal income and by extension expenditure. This is likely to be transitory, and Q2 should see a sizeable rebound, in no small part aided by favourable base effects.

There are no G10 central bank policy meetings this week, though the Bank of Canada will publish its regular review of the Canadian Financial System, with the focus above all on housing and more broadly very high levels of household, and follows some fairly sharp criticism last week of the Canadian mortgage market by governor Poloz. Fed speakers will likely underline that rates are on hold for a protracted period, though likely differ on the inflation outlook risks, and by extension the next move in rates. Some modest renewed strength in the USD index, and the risk of some major fallout for EM currencies, if US/china trade talks are not resolved amicably, will likely assure that both Bank Indonesia (6.0%) and Banco de Mexico (8.25%) keep rates on hold when they hold policy meetings this week.

On the political / trade front, in the aftermath of last week's US/China meeting, it is now at least clear how high the bar to a deal has been raised, with US setting a 1 month deadline to reach a deal, otherwise it will raise tariffs on a further $300 Bln of Chinese imports (details due on Monday). Meanwhile China has set out its conditions for reaching a deal, with Liu He saying in an extensive interview that a) the U.S. must remove all extra tariffs, b) set targets for Chinese purchases of goods in line with real demand and c) ensure that the text of the deal is "balanced" to ensure the "dignity" of both nations. It remains to be seen what retaliatory measures to the Friday increase in US tariffs China may announce. Trump's assertion that 'there is absolutely no need to rush' and the deeply flawed idea of using tariff income to buy up excess US farm production does not bode well, even if the comments were clearly intended for the domestic audience, as the 2020 election looms. On the Brexit front, a cross party deal to get May's Withdrawal Agreement over the line looks very unlikely, the more so given that it has little chance of getting parliamentary approval, amid continued foggy speculation about when May will either stand down or forced out, though according to some weekend talk, the picture could become clearer in the coming week.

Thoughts on Global Debt Growth and Financial Stability:


Main Economic Data & Events -  13 to 17 May 2019, compiled by: Elisavet Levogianni, Research Analyst

Sources: Bloomberg and Thomson Reuters


Sunday, 12 May

== EVENTS ==

U.S.A.:SF Fed's Daly gives commencement address at Syracuse University


Monday, 13 May

 # HOLIDAYS: Hong Kong - The day following the Birthday of the Buddha

 # ECONOMY: Australia Housing Finance (Mar); India CPI (Apr); Czech Rep., Romania & Serbia CPI (Apr); France BOF Industry Sentiment (Apr); Norway GDP (Q1); Turkey Current Account (Mar)

 # EARNINGS: Bridgestone (Q1 cons 87.45) // E.on (Q1 0.29) * Hochtief (Q1 1.82) * Prysmian (Q1) * Victrex (H1) // Amyris (Q1 $-0.42) * Catalyst Pharmaceuticals (Q1 $-0.13) * Legg Mason (Q4 $0.53) * Mustang Bio (Q1 $-0.37) * Samsonite (Q1) * Take-Two Interactive Software (Q4 $0.74) // Centrais Eletricas Brasileiras (Q1 cons 0.28)


== EVENTS ==

Australia: RBA's Debelle speaks on a panel on "The End of Libor and the Impact on Australian Financial Markets"

Philippines: General mid-term elections

India: Informal WTO ministerial meeting (ends 14 May)

Russia: US Secretary of State Pompeo meets with Foreign Minister Lavrov to discuss Venezuela, Syria and Ukraine (ends 14 May)

Belgium: EU Foreign Ministers meeting - likely to discuss Iran

Sweden: Riksbank's Ohlsson speaks on underlying inflation

U.S.A.:"Fed Listens - New England Perspectives on Fed Policymaking" conference - Boston Fed's Rosengren        (14:05, 17:55) and Fed's Clarida (14:10, 17:55) speak


Tuesday, 14 May

# HOLIDAYS: Malawi - Kamuzu Day

# ECONOMY: Japan Current Account (Mar prov), Trade Balance (Mar prov) & Economy Watchers Survey (Apr); India WPI (Apr); South Africa Unemployment Rate (Q1) Turkey & Eurozone Industrial Production (Mar); Germany ZEW survey (May); Netherlands GDP (Q1 prov); Poland Trade Balance (Mar); Sweden CPI (Apr), Core CPIF (Apr) & PES Unemployment Rate (Apr); U.K. Average Weekly Earnings (Mar), FLS Employment Change (Jan-Mar) & ILO Unemployment Rate (Jan-Mar); U.S.A. Import & Export Prices (Apr) & NFIB Small Business Optimism (Apr); Colombia Industrial Production (Mar) & Retail Sales (Mar)

# EARNINGS: Nissan Motor (Yr cons 104.35) // ACS Actividades de Construccion y Servicios (Q1 0.88) * Allianz (Q1 4.44) * DCC (Yr 3.58) * Deutsche Wohnen (Q1 0.39) * Dufry (Q1 0.85) * Evotec (Q1 0.08) * Innogy (Q1 0.81) * Italgas (Q1 0.10) * K+S (Q1 0.54) * Land Securities  (Yr 0.59) * Lanxess (Q1 1.10) * Merck (Q1 1.20) * Merlin Properties Socimi (Q1) * Nibe Industrier (Q1 0.82) * Pirelli (Q1 0.12) * Scout24 (Q1 0.48) * Thyssenkrupp (Q2 0.08) * Vodafone (Yr 0.10) // Agilent Technologies (Q2  $0.71) * Roan Resources (Q1 $0.16) * WageWorks (Q4 $0.27)


== EVENTS ==

Switzerland: NY Fed's Williams speaks at SNB/IMF Event

Austria: OPEC monthly Oil market report

U.K.: BoE's Strange, Head of Risk Infrastructure, Liquidity and Capital Division, Prudential Regulation Authority speaks at Operational Risk Europe Conference; BoE's Rule speaks at Prudential Regulation Seminar

Sweden: Riksbank's Ingves speaks on economic situation and current monetary policy

Brazil: COPOM releases May Monetary Policy Meeting minutes

U.S.A.: NY Fed issues Q1 2019 Household Debt & Credit Report; KC Fed's George speaks at Economic Club of Minnesota


Wednesday, 15 May

# ECONOMY: China Industrial Production (Apr), FAI (Apr), Retail Sales (Apr) & Surveyed Unemployment Rate (Apr); South Korea Unemployment Rate (Apr); India & Indonesia Trade Balance (Apr); Turkey Unemployment Rate (Feb); Israel & Ghana CPI (Apr); South Africa Retail Sales (Mar); Eurozone GDP (Q1 prov) & Employment Rate (Q1 prov); Bulgaria, Cyprus, Germany, Hungary, Poland, Portugal, Slovakia & Ukraine GDP (Q1 prov); Czech Rep. & Romania GDP (Q1 adv); Denmark GDP (Q1); Finland GDP Indicator (Mar); Italy Industrial Orders (Mar); U.S.A. Industrial Production (Apr), Retail Sales (Apr), Business Inventories (Mar), NAHB Housing Market Index (May), NY Fed Empire Manufacturing (May) & Total Net TIC Flows (Mar); Canada CPI (Apr) & Existing Home Sales (Apr); Argentina National CPI (Apr); Colombia GDP (Q1); Peru monthly GDP (Mar)

# EARNINGS: Alibaba (Q4 6.50) * Mitsubishi UFJ Financial (Yr cons 74.34) * Tencent (Q1 2.18) // 1&1 Drillisch (Q1 0.59) * A2A (Q1) * ABN Amro (Q1 0.50) * Ageas (Q1 1.20) * Aurubis (Q2) * British Land (Yr 0.33) * Compass (H1 0.43) * Credit Agricole (Q1 0.25) * CYBG (H1 0.15) * Euronext (Q1 0.78) * Experian (Yr 1.00) * Hera (Q1) * Raiffeisen Bank (Q1 0.92) * RWE (Q1 0.05) * Schibsted (Q1 1.35) * Snam (Q1 0.08) * SSP (H1 0.07) * TUI (Q2 -0.57) * United Internet (Q1 0.59) // Beyond Meat (Q1 $-0.15) * Brigham Minerals (Q1) * Cisco Systems (Q3 $0.77) * Macy's (Q1 $0.34) * WageWorks (Q1 $0.43)


== EVENTS ==

Estonia: ECB's Lane speaks at "The Euro at 20"

Romania: NBR rate decision - no change from 2.50%

Sweden: Riksbank's af Jochnick discusses developments on payment market; ICMA annual meeting (ends 17 May)

Norway: China National People's Congress Chairman Li visits (ends 17 May)

France: Macron and New Zealand PM Ardern co-chair a Paris summit of global leaders and technology executives to take the "Christchurch Call"

U.K.: BoE COO Place speaks at Women of The Square Mile; IMF Global Financial Stability chief Natalucci     participates in a roundtable

Poland: NBP rate decision - no change from 1.50%

Hungary: MNB releases April Monetary Policy Meeting minutes

Germany: Economy Minister Altmaier speaks at banking congress

U.S.A.: Fed's Quarles testifies to Senate Banking Committee; Richmond Fed's Barkin speaks to NY Association for   Business Economics


Thursday, 16 May

# ECONOMY: Australia Unemployment Rate (Apr); Japan PPI (Apr); Malaysia GDP (Q1); Israel GDP (Q1 adv); Eurozone Trade Balance (Mar); France ILO Unemployment Rate (Q1); Poland Core CPI (Apr); U.S.A. Jobless Claims, Housing Starts (Apr), Philly Fed Business Outlook (May) & Annual Revisions: Housing Starts, Building Permits, Manufacturers' Shipments, Inventories, Orders; Canada ADP Employment (Apr) & Manufacturing Sales (Mar)

# EARNINGS: Singapore Airlines (Yr 0.62) // 3i Group (Yr 1.27) * Assicurazioni Generali (Q1 0.42) * Bouygues (Q1 -0.24) * Burberry (Yr 0.82) * CNP Assurances (Q1) * EDP - Energias de Portugal (Q1 0.07) * KBC (Q1 0.81) * Manchester United (Q3 0.02) * National Grid (Yr 0.57) * NN (Q1 1.080) * Rockwool (Q1 1.25) * RTL (Q1) * Sunrise Communications (Q1 0.56) * Ubisoft Entertainment (Yr 2.98) * Wienerberger (Q1 0.12) // Applied Materials (Q2 $0.66) * Eagle Materials (Q4 $0.87) * Nvidia (Q1 $0.81) * Pinterest (Q1 $-0.09) * Walmart (Q1 $1.02)


== EVENTS ==

Australia: RBA's Bullock speaks at ASIC Annual Forum

Fiji: RBF rate decision

Indonesia: BI rate decision - no change from 6.00%

Austria: Banking summit with Finance Minister Loger and Economy Minister Schrambock (ends 17 May)

Belgium: EC's conference on the international role of the euro

Germany:  ECB's Weidmann speaks in Hamburg

Sweden: Riksbank's Ingves speaks at ICMA annual meeting

Canada:  BoC's Poloz and Wilkins hold press conference on the BoC review of the Canadian financial system

U.S.A.: Minneapolis Fed's Kashkari speaks on "Interest Rates, Monetary Policy and the Economy"; Japan's Chief Cabinet Secretary Yoshihide Suga meets US VP Pence to discuss Japanese abducted by North Korea

U.K.: BoE's Haskel delivers Ken Dixon Lecture

Switzerland: ECB's Coeure speaks at "The Future of Banking" conference

Mexico:  Banxico rate decision - no change from 8.25%


Friday, 17 May

# HOLIDAYS: Denmark - Great Prayer Day; Norway - Constitution Day

# ECONOMY: Japan Tertiary Industry Index (Mar); Singapore Non-oil Domestic Exports (Apr); Russia Trade Balance (Mar); Eurozone CPI (Apr final), Construction Output (Mar) & EU27 New Car Registrations (Apr); U.S.A. Leading Indicators (Apr) & Michigan Sentiment (May prov)

# EARNINGS: * EasyJet (H1 -0.56) * Richemont (Yr 2.91) * Sage (H1 0.14) // Cengage Learning (Q4) * Deere (Q2 $3.61)


== EVENTS ==

Mauritius: Bank of Mauritius rate decision - prior 3.50%

Belgium: EcoFin meeting

U.K.: BoE's Brazier speaks at Allen & Overy

U.S.A.: NY Fed's Williams meets with local leaders to discuss community development efforts; NY Fed's Williams participates in meeting and tours the Advanced Science Research Center, The City College; Fed's Clarida Speaks at `Fed Listens' Event

Jamaica: Bank of Jamaica rate decision


Saturday, 18 May

# HOLIDAYS: Bangladesh - Buddha Pournima

== EVENTS ==

U.S.A.: Dallas Fed's Kaplan participates in a conversation before The Society for Advancing Business Editing and     Writing (SABEW) Annual Spring Conference




Burkina Faso (S&P), Cyprus (DBRS), Finland (DBRS), Iceland (Moody's, S&P), Ireland (Fitch), Namibia (Moody's), Netherlands (S&P), Slovakia (Fitch), U.K. (Moody's).


Japan - JPY 2.7 Bln total 5 & 30-yr

Germany - EUR 1.0 Bln 30-yr

Italy - EUR 6.75 Bln max total 2022, 2026 & 2049 BTPs

France - EUR 8.0-9.0 Bln total 2022 & 2025 OATs

            - EUR 1.0-1.5 Bln total 2023, 2029 & 2036 OATeis

U.K. - Syndicated sale of new 1.625% 2054 Gilt

Canada - CAN 2.4 Bln 3-yr

Marc Ostwald is Chief Economist and Global Strategist at ADM Investor Services International Limited. Republished with permission.


The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.  © 2019 ADM Investor Services International Limited.