The fallout from the firing of FBI director James Comey undoubtedly continues to have an effect on broader market sentiment, while robust corporate earnings means we have a pretty calm market.

And after a busy period for central bank meetings, Q1 earnings and the French election, this week is a touch quieter as markets head into the latter half of May in a fairly sedate mood. Nevertheless there are still several big economic releases that have the potential to increase volatility.

Inflation

 

After the Bank of England kept interest rates on hold last week, Tuesday’s UK CPI inflation figures will be closely watched to see whether the Monetary Policy Committee is on the money or if it risks falling behind the curve by remaining overly dovish. Inflation has jumped to 2.3% but with growth lacklustre there seems little impetus to raise rates soon unless price growth really starts to accelerate.

On Wednesday there is the final reading for CPI inflation in the Eurozone. With estimates indicating that inflation rebounded last month to 1.9% from a lacklustre rise in March, the data could be important for the European Central Bank as it eyes a potential reduction in its quantitative easing programme.



GDP numbers

 

Also on Tuesday is the Eurozone flash Q1 GDP reading. Surveys suggest growth in the bloc is picking alongside a recovery in corporate earnings. Like the inflation data the reading will be important piece in the ECB’s assessment of monetary policy as it mulls a potential shift in language. Market watchers will be paying close attention to whether the GDP and inflation data seem enough to make Mario Draghi risks are no longer “tilted to the downside”.

Meanwhile on Thursday it’s the first quarter GDP reading for Japan. Again this will provide an important signal about whether the Bank of Japan’s ultra-loose monetary policy is paying off and therefore could be  big driver in yen pairs such as USDJPY and EURJPY.

Fed speakers

 

Towards the end of the week Federal Reserve officials are action. Cleveland Fed boss Loretta Mester speaks in Minneapolis on Thursday, while St Louis Fed president James Bullard talks on ‘US Economy and Monetary Policy’ on Friday. With the FOMC widely expected to raise rates at its June meeting markets will be sensitive to what they have to say about how they think policy is going in the short term.

Earnings season

 

The end is in sight for the first quarter earnings season but we still have a number of large cap stocks on both sides of the Atlantic to report.

Retailers Target, Home Depot and Gap provide the interest from Wall Street this week.

In the UK, EasyJet, Vodafone and Premier Foods all report on Tuesday in what should be a busy session for the FTSE 100. Burberry, National Grid, Thomas Cook, 3i and Royal Mail all report on Thursday.

 

Economic Calendar

(All times BST)

Monday, 15 May

00:01 – UK Rightmove house price index

03:00 – China industrial production

07:00 – Japan preliminary machine tool orders

08:15 – Switzerland PPI inflation

13:30 – US Empire State manufacturing index

Tuesday, 16 May

02:30 – Australia monetary policy meeting minutes

07:45 – French final CPI

09:00 – Italy preliminary Q1 GDP

09:30 – UK CPI, PPI and RPI inflation

10:00 – Eurozone flash Q1 GDP, German ZEW economic sentiment

13:30 – US building permits, housing starts

14:15 – US capacity utilisation rate, industrial production

23:45 – New Zealand PPI

Wednesday, 17 May

00:50 – Japan core machinery orders

09:30 – UK unemployment rate, claimant count change, average earnings

10:00 – Eurozone final CPI

13:30 – Canada manufacturing sales

15:30 – US crude oil inventories

Thursday, 18 May

00:50 – Japan preliminary Q1 GDP

02:30 – Australia unemployment rate, employment change

09:30 – UK retail sales

13:30 – US weekly unemployment claims, Philly Fed manufacturing index

15:30 – US natural gas storage

Friday, 19 May

07:00 – Germany PPI

13:30 – Canada CPI inflation, retail sales

Corporate Calendar

 

Monday, 15 May

TUI (TUI) – S1/2017

Tuesday, 16 May

Home Depot (HD) – Q1/2018, EPS estimate 1.604

EasyJet (EZJ) – S1/2017

Manchester United (MANU) – Q3/2017, EPS estimate -0.038

Premier Foods (PFD) – Y/2017, EPS estimate 0.071

Vodafone Group (VOD) – Y/2017, EPS estimate 0.049

Wednesday, 17 May

Cisco Systems (CSCO) – Q3/2017, EPS estimate 0.579

Target (TGT) – Q1/2018, EPS estimate 0.912

SSE (SSE) – Y/2017, EPS estimate 1.222

Thursday, 18 May

Gap Inc (GPS) – Q1/2018, EPS estimate 0.287

Wal-Mart Stores (WMT) – Q1/2018, EPS estimate 0.962

3i Group (III) – Y/2017, EPS estimate 1.235

Burberry Group Y/2017, EPS estimate 0.769

National Grid (NG) – Y/2017, EPS 0.663

Royal Mail (RMG) – Y/2017, EPS estimate 0.407

Thomas Cook (TCG) – S1/2017, EPS estimate -0.151

Friday, 19 May

Foot Locker (FL) – Q1/2-18, EPS estimate 1.394

 

Source: Bloomberg

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