Market Overview: US GDP & Consumer Data

Hello traders! Start your week strong with E8’s Market Overview which equips you with essential economic insights and fundamental analysis. Stay ahead of the curve!

Key Events of the Week Include:

• Global Flash PMI data release (Tuesday)
• Australian CPI (Wednesday)
• German IFO Business Climate & GfK Consumer Confidence (Wednesday and Thursday)
• US Advanced GDP Growth Rate (Thursday)
• Bank of Japan Rate Decision (Friday)
• US Personal Income & Spending (Friday)

Monday, April 22nd, 2024

The week begins with a sense of calm, offering markets a chance to breathe after last week’s volatility. Today, traders will be eyeing two minor economic releases. First, Canada’s Producer Price Index (PPI), scheduled for 1:30 pm, will provide a glimpse into inflationary pressures within the Canadian economy.

Later, at 3:00 pm, the European Commission will release its flash estimate of Eurozone Consumer Confidence. This metric is closely watched as a gauge of the region’s economic outlook. A positive reading could support the euro, while a decline might point towards weakening sentiment.

While European Central Bank President Christine Lagarde is scheduled to speak at Yale University at 4:30 pm, her lecture is unlikely to reveal new insights into the ECB’s monetary policy stance. Nonetheless, traders may listen closely for any subtle cues regarding the bank’s view on inflation and interest rates.

Tuesday, April 23rd, 2024

Tuesday ramps up the action with a global focus on Flash PMI data releases. Purchasing Managers’ Index (PMI) provides a crucial snapshot of economic activity in the manufacturing and services sectors around the world. The index varies between 0 and 100, with a reading above 50 indicating an overall increase (expansion) compared to the previous month, and below 50 an overall decrease (contraction).

Key PMI Release Schedule:

• Australia: 12:00 am
• Japan: 1:30 am
• France: 8:15 am
• Germany: 8:30 am
• Eurozone: 9:00 am
• United Kingdom: 9:30 am
• United States: 2:45 pm

Aside from PMI data, New Zealand’s International Trade release at 11:45 pm EDT rounds out the day with limited market impact.

Wednesday, April 24th, 2024

Wednesday’s economic calendar revolves around inflation and business sentiment, offering potential catalysts for market moves. The spotlight first falls on Australia, where the Bureau of Statistics will release the latest inflation figures at 2:30 am. The market anticipates a continued easing of price pressures, with a projected 3.4% year-over-year (yoy) inflation rate for Q1 2024. If the figure aligns with or comes in lower than expectations, it could bolster the possibility of interest rate cuts by the Reserve Bank of Australia (RBA). Such a scenario would bring relief to consumers struggling with the high cost of living.

Shifting focus to Europe, Germany’s influential IFO Business Climate Index is scheduled for release at 9:00 am. Following March’s significant surge, expectations remain elevated with an anticipated April reading of 88.9. Traders will closely monitor this release for any indication that recent optimism could be fading. A noticeably lower-than-expected index could signal growing concerns about lingering inflation and its impact on business activity.

For additional insights into European sentiment, the UBS & CFA Society Switzerland will also release their Economic Sentiment Index.  Later,  at 1:30 pm EDT, Canadian Retail and Manufacturing Sales data, along with the US Durable Goods Orders release, will provide a window into North American economic activity. Additionally, the Bank of Canada’s (BoC) Summary of Deliberations will be published letting the public take a look at their recent interest rate decision, potentially revealing clues about their outlook on inflation and future monetary policy moves.

Thursday, April 25th, 2024

Thursday kicks off early with a focus on German consumer sentiment. At 7:00 am EDT, the GfK Consumer Climate Indicator release offers insights into consumer expectations regarding income, spending, and savings trends. A stronger-than-expected reading could provide a boost to the euro (EUR), hinting at potential resilience in the face of economic headwinds.

The remainder of the morning remains relatively quiet on the data front. However, the focus intensifies at 1:30 pm with the release of the highly anticipated US Advanced GDP Growth Rate for Q1 2024.  Market consensus points to a significant contraction of 2.5% compared to the 3.4% expansion in the previous quarter. This anticipated drop, if confirmed, would underscore the challenging economic landscape. Alongside the GDP figures, US International Trade data and the weekly Initial Jobless Claims report will offer additional context. The International Trade figures will gauge the health of exports and imports, while the Initial Jobless Claims data provides a real-time snapshot of the labor market.

Friday, April 26th, 2024

Friday begins with a spotlight on the Bank of Japan (BoJ) Rate Decision. While no change in interest rates is anticipated, the market will be watching closely for any indication of the BoJ’s plans to address the recent weakness of the Japanese yen (JPY). The USD/JPY exchange rate has soared to a 34-year high, raising questions about potential BoJ intervention in the FX market. Traders will be eager to see if the BoJ repeats its previous strategy of direct market intervention or hints at other measures to support the yen.

The afternoon shifts focus to the United States, with the release of Personal Income and Spending data alongside the Core PCE Price Index.  These figures provide a crucial window into consumer behavior and inflationary pressures within the US economy. Personal Income and Spending will reveal whether wages are keeping pace with inflation and how this impacts consumer spending power. 

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