Weekly Outlook, 12 - 16 April | IFCM UK
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Earning reports and Retail sales!

Chinese GDP and Inflation data, UK GDP, Euro Zone CPI, and retail sales from the U.S., E.U., and New Zealand will be the most critical data of the week ahead, while the U.S. Q1 earnings season of 2021 also will be started, mostly with Banks from this week. Let's check out the week ahead events with more details.

Friday is Chinese Day!

The world's largest factory and the second economy will publish essential data this Friday, telling us what we have to expect from the Chinese economy in the rest of 2021. However, three days earlier on Tuesday, Export, Import, and Trade Balance data for March will also matter.

The Chinese economy is likely to benefit from solid recovery expectations in the U.S. and other economies, as with Vaccinations' progress, especially entering the warmer months and the economic reopening that we are likely to see throughout the summer months. These hopes must confirm the recent month's improvement in Chinese exports and imports, while domestic demand also growing faster than before.

And Friday, China due to publish Q1 GDP and March retail sales. Based on the latest recoveries and published data from China and many other developed economies, we can say that primarily 6% optimism expectation of 2021 GDP from Chinese authorities, now it seems even conservative. The data is anticipated to show that the Chinese economy grows 18.8% in the first quarter of 2021, comparing to 6.5% of the year-ago period.

Retail sales data for March, in a bit conservative expectation, emerge to slip a bit to 27.2% y/y from the strong start of 33.8% y/y in the first months of the year. However, compared to a year ago, it is expected of another gain, as it was the most challenging lockdown period in china, in last February and March. Nonetheless, with improving data on the Manufacturing and Service sectors, it is expected that the Chinese consumer to continue to remain resilient as we head into the summer months.

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U.K. and E.U.!

UK GDP is expected to rise and improve in February, after a .9% contraction in January. Since the latest 2.9% contraction also was much better than expectation, with an increase in February numbers, Q1 is likely to be much better than the -4% slowdown of earlier BoE expectations. Other published data shows growth in Retails Sales, Employment, and PMI data, supporting the BoE revised expectation to higher numbers.

In Euro Zone, CPI data, which we are waiting on Friday, expected to be unchanged, while Core inflation should drop back to 0.1% m/m from 1.0% m/m. Like the U.S. and other economies, there is a Risk in E.Z. Also, underlying inflation pressures will grow faster than officials await. For E.Z. February Retail Sales also we are expecting the 1.5% gain, after 5.9% contraction of last month. However, since another wave of Lockdowns started in March, a lower increase or decline is much more expected for March and April. Especially in Germany, where restrictions have been more severe than in other major Eurozone countries.

German Harmonized Index of Consumer Prices and ZEW economic sentiment also will matter for the market participants, and it's expected to see a decline in HICP and an increase in ZEW numbers.

U.S. data!

In the United States, we are waiting for Commerce Department data for the coming week, which should give more apparent signs on the pace of inflation and economic growth.

In CPI front, after fell back to 1.66% of U.S. 10 Year Bond Yields, from 1.75%, and while J. Powel and other FOMC members used to play down the inflation risk; markets have been quite a bit; however, with huge stimulate packages of the U.S. government, still higher inflation in the mid-term is expected. On the other hand, the positive sentiment and labor market data, retail sales are also hoping to see an additional gain of 5% in March, after a 3% fall of February, which was the most significant drop since April 2020.

Besides, this week's economic calendar includes reports on jobless claims, building permits, and housing starts.

Besides the mentioned data, Fed Chair Jerome Powell discusses the economy in an interview conducted by CBS's "60 Minutes" program on Sunday night and will speak Wednesday at an Economic Club of Washington. Several FOMC members also due to speak during the week.

Earnings Season Kicks Off

U.S. Q1 earnings season will start this week, with primarily financial enterprise reports. We are waiting for:

  • Mon: #APHA
  • Tues: #FAST
  • Wed: #JPM #GS, #WFC, #BBBY, #INFY and #LOVE
  • Thurs: #TSM, #BAC, #BLK, #DAL, #PEP, #RAD, #UNH, #AA, #JBHT, #LAKE, #PPG
  • Fri: #MS,#PNC, #STT, #ALLY, #BK, #KSU, #DIA, #SPY, #QQQ, #IWM

Source: https://tradeproskills.com

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