The Economic Data for the day is in and there are 3 things to focus on. U.S. inflation data will the main data this week. As the number could deciding factor in the near-term market sentiment. Meanwhile, retail sales data along with earnings results from some big-name retailers will give fresh insights into the strength of consumer spending, a key driver of the economy. The UK and China are to release what will be closely watched economic data.
The key economic data and events for this week
Tuesday- US PPI, Fed speak
The main attract on Tuesday will U.S. producer price index data for any indication that price pressures are finally easing after months of strong inflation gave rise to fears that the Federal Reserve may not cut interest rates this year. The Core PPI is seeming to be remain unchanged at 0.2%, while PPI m/m is foreseen with minor increase of 0.3% from previous 0.2%. Which could weight on the dollar.
On the same day, Fed Chair Jerome Powell speak will give some insight. The latest meeting indicated that the central bank was still looking to eventually cut rates and the latest U.S. employment report showed signs of cooling in the labor market.
In addition, Claimant Count Change will be released, which would haves a negative impact on the pound. Because the data is forecast at 13.9k with a slight change from the previous 10.9K.
Wednesday – US Inflation
The market will react strongly on crucial CPI report. The number is foreseen underlying inflation rising 3.4% on a year-over-year basis, which would be the smallest decrease compared to 3.5% in over three years.
While, Core CPI m/m is foreseen at 0.3% from previous 0.4%, CPI m/m is expected to remain unchanged at 0.4%, that could have a neutral impact on the dollar.
But a hotter-than-expected inflation reading would likely price out rates cuts for the rest of the year, reigniting market volatility.
Core Retail Sales m/m and Retail Sales m/m will be release on the same day. Market will get some fresh insights into the health of the U.S. consumer this week with April retail sales data. The number is foreseen at 0.2% from previous 1.1%, and 0.4% from 0.7%, both number will may have negative impact on the dollar.
Thursday – US Weekly jobless claim, Japan GDP
Markets will focus on the Japan Prelim GDP q/q data on Thursday. The number is having to forecast by in contraction of 0.4% from previous increase of 0.1%. A negative growth number will have a significant impact on the market.
US jobless ads are focused on the same day. The data should come in at 231K. This could weigh on the dollar.
Friday – China Macro economic number
China is to publish a string of economic data on Friday that will show how the world’s number two economy was performing at the start of the second quarter.
April home price data will give fresh insights into the state of the property sector which has been engulfed by a debt crisis for about three years now, leaving property developers on the brink of collapse
Industrial production is foreseen at 5.4% from previous 4.5%, retail sales at 3.9% from previous 3.1% accelerating year on year.
Comments from policymakers at last month’s Politburo meeting have primed investors for a wave of stimulus measures from Beijing to boost economic recovery, keeping the market mood buoyant for now.
On the same day, US Industrial Production m/m data provides fresh insight on the economic outlook. The data is expected to moderate at 0.2% from 0.4% previously, which could be negatively affected on the dollar.
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