MORNING ROLL CALL
Focus this week will be on: GDP estimates, PMI data and FOMC minutes whilst the dollar remains under pressure
The FOMC (The Fed members) will release their minutes this week, concerning the meeting held earlier in May, at which the Fed members decided to keep interest rates unchanged. However, we’re now five months into the year, a year in which the Fed (subtly) obligated itself to raise rates by approx. three times during 2017.
It’s not that the Fed are running out of time, more likely they’re running scared, as only the ‘soft data’ appears to be suggesting that the USA economy is as healthy as the central bank and government administration would like ordinary Americans to believe. Quite simply; the hard data recently released isn’t supporting the “robust economy” narrative, continually peddled by the various USA government departments. Therefore analysts and investors will analyse the minutes carefully when they’re released on Wednesday, for any forward guidance clues, regarding potential interest rate rises.
The USA GDP estimate is published on Friday, it’s current Q1 annual rate came on at 0.7% on April 28th, significantly below forecast, a disappointing figure that may have focused the FOMC collective minds, during their two day rate setting and monetary policy meeting in April.
Other USA economic calendar events worthy of note are the services and manufacturing PMIs, new and existing home sales, whilst the weekly data concerning crude inventories and unemployment claims must always be carefully scrutinised. Core durable orders data will also be released. The respected university of Michigan consumer sentiment reading will be revealed on Friday.
In the UK, with the election campaign now fully underway, the latest official ONS data concerning business investment, public sector borrowing and GDP will be closely analysed, mortgage approval data from the BBA (British Banking Association), will also be published. The inflation report hearings for the UK will be held on Tuesday, analysts will monitor this meeting for signs as to how the UK’s central bank and government intend to control the inflation currently building up in the economy, principally as a consequence of the pound falling in value by approx 15% versus the euro and USD, since the Brexit referendum decision in June 2016.
Canada’s wholesale sales data will be realised this week as will be the bank of Canada’s statement regarding the interest rate announcement, expected to remain unchanged at 0.5%.
Markit Economics will publish Japan’s flash manufacturing PMI on Wednesday. Japan’s all industry activity reading will be printed on Tuesday. Monday sees the publication of several other Japanese key metrics, namely; exports, imports and the trade balance. CPI data for Japan and Tokyo core CPI will also be released.
Germany’s Q1 GDP reading will be published this week, Markit will also release several European PMIs throughout the week on: Germany, France and the wider Eurozone. The ECB monetary policy meeting accounts will be published. Germany’s Ifo and GfK business climate readings will both be revealed this week.
ECONOMIC CALENDAR (all times are London BST time)
Monday, 22 May
00:50 – Japan exports, imports, trade balance
Tuesday, 23 May
05:30 – Japan all industries activity
07:00 – German final Q1 GDP reading
08:00 – French flash services & manufacturing PMIs
08:30 – German flash services & manufacturing PMIs
09:00 – Eurozone flash services & manufacturing PMIs, German Ifo business climate
09:30 – UK public sector net borrowing
10:00 – UK inflation report hearings
13:30 – Canada wholesale sales
14:45 – US flash services & manufacturing PMIs
15:00 – US new home sales
Wednesday, 24 May
01:30 – Japan flash manufacturing PMI
02:30 – Australia construction work done report
07:00 – GfK German consumer climate
15:00 – Bank of Canada rate statement
15:00 – US existing home sales
15:30 – US crude oil inventories
19:00 – FOMC meeting minutes
Thursday, 25 May
03:00 – New Zealand annual budget release
All Day – Bank holiday in Germany, France, Switzerland
09:30 – UK second estimate Q1 GDP, preliminary business investment, BBA mortgage approvals
12:30 – ECB monetary policy meeting accounts
13:30 – US weekly unemployment claims
Friday, 26 May
00:30 – Japan national core CPI, Tokyo core CPI
06:00 – Bank of Japan core CPI
07:45 – France consumer spending
13:30 – US second estimate Q1 GDP, core durable goods orders
15:00 – Revised University of Michigan consumer sentiment
