WRAP:
By Michael J. Casey
After Friday's much-weaker-than-expected March jobs report in the U.S., the suspense is building over the U.S. economic outlook. Most economists believe that a spate of weak numbers is the product solely of very cold weather and, much as occurred last winter, that the blow to GDP will be overcome when we all warm up. But because we are in a policy tightening phase, where the Federal Reserve is supposedly planning to raise interest rates sometime this year, the data are nonetheless causing a rethink about the direction of U.S. monetary policy and, by extension, a pullback in the dollar. With a few Fed speakers due to make comments in the coming week, along with some bits of pieces of data out of the U.S. and the eurozone -- notably, services purchasing manager surveys -- the market will get a chance to recalibrate or confirm this reassessment of the cross-Atlantic policy differential.
MONDAY
INDIA: 1 a.m. EDT (10:30 a.m, New Delhi). Markit Economics March services purchasing managers' index.
India's manufacturing base is expanding, at least according to the manufacturing PMI released last week. Now it's time to see whether its service sector -- uniquely important for tech-focused India -- is also expanding. The problem is that India's prospects in the outsourcing and offshoring industries for which places like Bangalore became famous are being undermined by obsolescence-inducing robotics and automation. Services could be held back by secular forces as much as cyclical ones, in other words.
U.S.: 8:30 a.m. EDT. Federal Reserve Bank of New York President William Dudley speaks in Newark, NJ
Here's a chance for Mr. Dudley to weigh on the significance of Friday's disappointing jobs report for March. How far back in the year does this push the likelihood of a Fed rate hike? Or does it simply confirm Fed officials' suspicions that the jobs market was due for the kind of (temporary) cold weather adjustment that had shown up in other indicators from January and February.
U.S.: 10 a.m. EDT. Institute for Supply Management March non-manufacturing report on business. [Expected 56.9, unchanged from February.]
The manufacturing sector suffered in March, presumably on account of cold weather, or so said last week's manufacturing PMI from the ISM. Did something similar show up in the services sector?
WORLD: Various Western markets closed for Easter Monday.
TUESDAY
AUSTRALIA: 12:30 a.m. EDT. (2:30 p.m., Sydney) Reserve Bank of Australia April cash rate decision
The RBA has made no secret of the fact that it is considering another rate cut. Is this the meeting in which it takes it cash rate another notch below its current record-low level of 2.25%?
INDIA: 1:30 a.m. EDT. (11 a.m, New Delhi). Reserve Bank of India Bi-Monthly Monetary Policy Statement
The RBI recently adopted an inflation-targeting regime, setting itself an initial target of below 6% inflation by January 2016 and then by March to have implemented a 4% target within a plus-or-minus 2 percentage-point band. With inflation ticking higher in February and the RBI having cut rates by another half-point to 7.5% in early March, that scenario doesn't leave much room for another easing at this meeting.
EUROZONE: 3:15 a.m. -4 a.m. EST. (9 a.m-10 a.m, Brussels) March services PMIs
--SPAIN: [In February, index was 56.2.]
--ITALY: [Expected 50.9 vs. 50 at end-February.]
--FRANCE: [Expected 52.8, unchanged from "flash" mid-March reading, down from 53.4 at end-February.]
--GERMANY: [Expected 55.3, unchanged from "flash" mid-March reading, vs. 54.7 at end-February.]
--EUROZONE: [Expected 54.1 unchanged from "flash" mid-March reading, vs. 53.7 at end-February.]
Manufacturing PMIs surprised to the upside last month, going further above the preliminary flash readings. If something similar is seen in the non-manufacturing readings it will be read as confirmation that the eurozone recovery is continuing and, by extension, that the European Central Bank's monetary easing program is working.
EUROZONE: 5 a.m. EDT. (11 a.m, Brussels) February producer price index. [Expected PPI +0.4% on-month vs. -0.9%in January; expected -2.9% on-year vs. -3.4% in February.]
As with consumer price data, the stabilization in oil prices has caused price indexes in the producer sector to finally stabilize. That's a pure mathematical consideration and it doesn't mean that deflation has been defeated. But it hopefully also indicates that supply-driven price declines haven't morphed into a more destructive demand-driven feedback loop of spending deferrals and perpetual downward price adjustments.
U.S.: 8:50 a.m. EDT. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota speech at Bismarck-Mandan Chamber of Commerce
Mr. Kocherlakota is not a voting member of the Federal Open Market Committee. But having stamped himself as an maverick dove in a few high profile dissents last year, what he has to say could be interesting.
JAPAN: 7:50 p.m. (8:50 a.m Wednesday, Tokyo). February balance of payments. [Current account surplus expected 1.1 trillion yen. vs. 61.4 billion yen.]
A rebound in Japan's current account surplus isn't a bad thing. It means that there's still a store of domestic savings with which to finance the government's gargantuan debt. But it's best if it's being driven by export growth rather than import contraction. It's not clear that's the case.
WEDNESDAY
SWITZERLAND: 3:15 a.m. EDT. (9:15 a.m., Zurich.) March consumer price index. [CPI in February -0.3% on-month, -0.8% on-year.]
With the Swiss National Bank having let the Swiss franc leap in value, deflationary pressures are being imported into Switzerland from the eurozone and elsewhere in the world.
TAIWAN: 4 a.m. EDT. (4 p.m., Taipei) March merchandise trade. [Trade surplus expected $4.6 billion vs. $4.56 billion in February; exports expected -3.1% on-year vs. -6.7% in February; imports expected -13.3% vs. -22.4%.]
The surge that Taiwan exporters got last year from a pickup in demand for the semiconductors for new generation smartphones such as the iPhone appears to have dissipated.
JAPAN: Time N/A. Bank of Japan monetary policy decision.
It's now been two years since the Bank of Japan began its aggressive asset-buying program to ease monetary conditions. There's no sign of it ending and maybe even the possibility of its being expanded.
BRAZIL: 8 a.m. EDT (9 a.m., Sao Paulo) March consumer price index. [CPI in February was +1.22% on-month, +7.7% on-year.]
Brazil absolutely has to break the back of inflation if it is to get out of the current worst-of-both-worlds problem of a falling real, depleted purchasing power and near-zero growth.
U.S.: 2 p.m. EDT. Federal Open Market Committee meeting minutes and economic forecast
An important set of minutes. These could shed light on the rationale behind the Fed's seemingly dovish decision to open the last policy statement with a unexpectedly negative downbeat description of the economic outlook. Those words offset the more hawkish fact that the FOMC simultaneously removed the word "patient" from phrasing characterizing its capacity to wait before hiking rates.
SOUTH KOREA: 9 p.m. EDT. (10 a.m. Thursday, Seoul) Monetary Policy Committee meeting & decision
The pressures is very strong on the Bank of Korea to announce another rate cut to follow last month's quarter-point cut with which it took its base rate down to 1.75%. The manufacturing sector is contracting again, domestic spending is weak and exports are waning.
THURSDAY
GERMANY: 2 a.m. EDT. (8 a.m., Berlin) February industrial production index. [Expected +1.5% on-month versus +0.6% on-month in January.]
German industry is going through one of those defiant grow-at-all-costs phases. That's generally good news for the rest of Europe, but only to the extent to which those gains are transferred to German households as a means to boost spending on goods produced in neighboring economies.
JAPAN: 2 a.m. EDT. (3 p.m., Tokyo). March preliminary machine tool orders. [In February, orders were +28.9% on-year.]
This is often viewed as a key leading indicator of future industrial activity. Last month's gain was impressive. That's a rare good a sign in an economy that's still held back by sluggish consumer demand.
U.K.: 7 a.m. EST. (12 p.m, London). Bank of England interest rate decision
Until the Fed takes action, the BOE is going to stand pat. But with some healthier recent economic data it will be interesting to see if the two hawks on the Monetary Policy Committee -- Martin Weale and Ian McCafferty -- feel compelled to revive the dissents they'd previously maintained over the continuation of super-easy monetary policy.
U.S.: 8:30 a.m. Unemployment insurance weekly claims report - initial claims. [Weekly jobless claims expected 280,000 vs. 268,000 in prior week.]
The low jobless claims data are offering evidence that the recent weakness in the rest of the U.S. economy, including last week's disappointing March jobs report, is a temporary, cold weather-induced phenomenon that will pass when warmer weather kicks in.
GREECE: Time N/A. Greece scheduled to make 450 million-euro payment to International Monetary Fund as part of bailout agreement
Suddenly, even since the Greek Interior Minister threatened that Greece might not make this payment, it is looming as a flashpoint. Such a threat is clearly used a negotiating tool, a bid to try to get the European Union to soften the terms of its bailout. It amounts to a classic game of chicken. Will Greece's creditors or its government blink first?
CHINA: 9:30 p.m. EDT. (9:30 a.m. Beijing, Friday)
--March consumer price index. [CPI in February was +1.4% on-year.]
--March producer price index. [PPI in February was -4.8% on-year.]
China's overcapacity in manufacturing and infrastructure, and its waning demand for commodities, is driving down prices and creating a real disinflationary trend even as the economy is still projected to grow at more than 6%.
FRIDAY
U.K.: 4:30 a.m. EDT. (9:30 a.m, London). Monthly industrial production figures. [In February, industrial output was -0.1% on-month, +1.3% on-year.]
February was a step back for U.K. industry but other indicators, including manufacturing surveys, suggest that output should be growing. March might show a rebound.
U.S.: 8 a.m. EDT. Federal Reserve Bank of Richmond President Jeffrey Lacker speech on economic outlook.
Last week, Mr. Lacker confirmed the notion that his the most hawkish voting member of the FOMC by saying there was a strong case for June rate hike. Does he still feel that way in the aftermath of Friday's weak payrolls report?
(END) Dow Jones Newswires
April 06, 2015 00:00 ET (04:00 GMT)
(MORE TO FOLLOW) Dow Jones Newswires
April 06, 2015 00:00 ET (04:00 GMT)
#FX
#Forex
#Yen
#Dollar
#Yuan
#Euro
0 Response to "What Matters for Global Markets in The Week Ahead"
Thanks for give comment.