Central banks always bang on about monetary policy being data-dependent. This week’s batch of PMI surveys, which complete the picture for Q1 GDP growth, will provide a good idea of just what they might be thinking. Friday’s nonfarm payroll numbers will be central to expectations of the US Federal Reserve’s course of action.

PMI surveys

 

April kicks off with the final PMI readings for Q1 for a host of major economies. With business surveys and recent PMIs hitting six-year highs markets expect another round of upbeat numbers for the manufacturing and services sectors.

Among the most closely followed releases is Wednesday’s UK services PMI. A bellwether for the wider UK economy, this report is likely to offer a clearer idea of just how resilient Britain’s businesses are in the face of Brexit. The manufacturing PMI on Monday will also be watched for signs of continued pressure on input prices which may indicate a further uplift in headline inflation.

 

Nonfarm payrolls

 

The first Friday of the month sees the usual nonfarm payrolls release from the US. It comes at a crucial moment for Fed watchers as a spot of stock market turmoil has left investors questioning whether US interest rates will rise as fast as expected. We’ve seen doubts creep in, with markets now less certain of three hikes this year.

Fresh doubts about the Trump trade mean the US central bank may not need to, or wish to, tighten any more this year. A strong jobs report – and higher wages – would support the case for another hike irrespective of the politics.

We're hosting a special live trading webinar in the minutes before the release. The webinar takes place at 12:00 on April 7th, with the NFP numbers due out at 13:30.

FOMC minutes

 

Sticking with the Fed, on Wednesday is the release of the minutes from the March meeting of the Federal Open Market Committee (FOMC), which saw members vote for a 25-basis-point rise in rates. The minutes ought to give markets a much clearer understanding of how policymakers view the US economy and where they think the risks to the recovery are coming from.

Of note, Minneapolis Fed president Neel Kashkari didn't think rates should rise yet and voted against hiking, which highlights there are still meaningful doubts about just how quickly and how far the Fed should raise rates in this cycle. The temptation to hike is being tempered by the fact that labour market slack (of which there is more than headline figures might suggest), means there is hardly any pressure on wages and that means inflation should not accelerate too quickly.

Politics

 

Political risk remains high. Article 50 has been triggered and markets will remain highly sensitive to develops as the UK and EU negotiate terms. Over in Washington, following the failed attempt to overhaul Obamacare, president Donald Trump will be looking to reassert his control over a recalcitrant Republican party. Any hint that planned tax reforms will be watered down is not likely to go down well with equity markets. Meanwhile, in Europe market participants will begin to focus on France as we approach the sharp end of the presidential election campaign.

Economic calendar

(All times BST)

Monday, 3 April

All day – China bank holiday

00:50 – Japan Tankan manufacturing index, Tankan non-manufacturing index

02:30 – Australia retail sales, building approvals

02:45 – China Caixin manufacturing PMI

06:00 – Bank of Japan core CPI

08:15 – Spanish manufacturing PMI

08:50 – French final manufacturing PMI

08:55 – German final manufacturing PMI

09:00 – Eurozone final manufacturing PMI

09:30 – UK manufacturing PMI

15:00 – US ISM manufacturing PMI

15:30 – Bank of Canada business outlook survey

23:00 – New Zealand NZIER business confidence

Tuesday, 4 April

All day – China bank holiday

02:30 – Australia trade balance

05:30 – RBA cash rate and rate statement

08:00 – Spanish unemployment change

09:30 – UK construction PMI

10:00 – Eurozone retail sales, revised GDP

13:30 – Canada trade balance, US trade balance

15:00 – US factory orders

Wednesday, 5 April

00:01 – UK BRC shop price index

08:50 – French services PMI

08:55 – German services PMI

09:00 – Eurozone final services PMI

09:30 – UK services PMI

13:15 – US ADP nonfarm employment change

15:00 – US ISM non-manufacturing PMI

15:30 – US crude oil inventories

19:00 – FOMC meeting minutes


Thursday, 6 April

02:45 – China Caixin services PMI

07:00 – German factory orders

08:15 – Swiss CPI inflation

12:30 – ECB monetary policy meeting accounts

13:30 – Canada building permits

13:30 – US weekly unemployment claims

Friday, 7 April

07:00 – German industrial production, trade balance

07:45 – French industrial production, trade balance, government budget balance

08:30 – UK Halifax house price index

09:30 – UK manufacturing production, industrial output, construction output, goods trade balance

13:00 – US NIESR GDP estimate

13:30 – Canada unemployment rate

13:30 – US nonfarm payrolls, average hourly earnings

Corporate calendar

 

Monday, 3 April

Belvoir Lettings (BLV) – Y/2016, EPS estimate 0.074

Tuesday, 4 April

ASOS (ASC) – S1/2017, EPS estimate 0.248

Wednesday, 5 April

Bed Bath & Beyond (BBBY) – Q4/2017, EPS estimate 1.779

Walgreens Boots Alliance (WBA) – Q2/2017, EPS estimate 1.362

HSS Hire Group (HSS) – Y/2016, EPS estimate 0.028

Thursday, 6 April

Ferrexpo (FXPO) – Q1/2017

Source: Bloomberg

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