Weekly Market Outlook: Jobs & Inflation Data on the Docket
However, trade wars could dominate the newswires this week
The week ahead is expected to be somewhat slower as far as economic reports are concerned. The major economic events over the week will focus on the labor market reports from Australia and the UK.
The ongoing trade war tussle between the US and China could also rear its ugly head in the coming days.
Meanwhile, economic data from the eurozone will cover the second revised estimates for GDP growth, as we wait for German GDP data later in the week. The week culminates with the final inflation report for March. Consumer prices are forecast to rise strongly in April, as per the initial estimates.
Data from Canada will include the monthly inflation report. Consumer prices are expected to remain moderate over the month. In the US, the only main event this week will be the retail sales report.
Retail sales in the US are forecast to rise at a rather modest pace compared to the months before. Besides the retail sales report, industrial production and regional manufacturing index reports are also due over the course of the week.
Here’s a quick recap of what’s to come in the currency markets this week.
Busy Week Ahead for the Euro
Economic data from the eurozone will see a host of releases covering inflation for both the eurozone and Germany, as well as final inflation estimates. The data is likely to shift the course for the euro currency as overall outlook could pick up.
The week starts off with the final inflation report from Germany. As forecast in the flash estimates, Germany’s headline inflation rate will rise 1.0% for April. Meanwhile, inflation for the eurozone is set to be confirmed at 1.7% on the headline and 1.2% on the core.
The pick up in consumer prices comes due to the seasonal Easter effects, which see a rise in transportation and airfares. Although the data could bring some positive cheer, policymakers are likely to see through the monthly change. Consumer prices are still way off from the ECB’s 2% inflation target rate.
Later in the week, the eurozone’s revised GDP figures will be released. Growth is forecast to rise at a pace of 0.4% in the first three months of the year. This marks a somewhat faster pace of growth compared to the previous quarter.
This week will also see the German ZEW economic sentiment index. Forecasts point to a strong rebound in the index which could rise to 5.0.
Australia Unemployment Rate to Hold Steady at 5.0%
Data from Australia this week will cover the labor market report. The week starts off with the release of the quarterly wage price index. Wages are forecast to rise at a pace of 0.6% on the quarter, marking a soft increase from 0.5% in the previous quarter.
Later in the week, the monthly unemployment report is forecast to show that Australia’s unemployment rate held steady at 5.0%. This would mark a second consecutive month after the unemployment rate fell to 4.9% in February this year.
The average number of jobs added during the month is forecast to rise at a slower pace of 15.2k for April. This is a softer estimate comparing to the 25.7k jobs added the month before.
US Retail Sales Set to Fall
The economic docket from the US this week will see only the retail sales report being the main headline event. Core retail sales could rise just 0.7% while headline retail sales could show a 0.2% increase.
Both counts of retail sales show that consumer spending at stores rose at less than half the pace from the previous month.
Besides the retail sales report, the regional manufacturing index reports will be coming out, shedding light on the manufacturing activity across the economy.
Some Fed members are also due to speak over the week. This could give more insights into the Fed’s monetary policy course over the coming months. However, the ongoing US and China trade wars could remain at the forefront this coming week.