A surprisingly weak U.S. unemployment report on Friday included lower-than-forecast payroll growth, but a welcome increase in wages. Despite this latest data, Federal Reserve easing this year is still accepted as a near-certainty, leaving investors looking elsewhere in the world for signs of potential central bank action. The Reserve Bank of Australia will announce its month decision on Tuesday. The Bank of Japan and Bank of England will make their decisions known on Wednesday and Thursday, respectively. While Australia is the only bank that forecasters think likely at all to make a change, Japan’s announcement might still be closely watched by international investors. Bank governor Haruhiko Kuroda is increasingly finding himself on the defensive, as the bank’s massive easing program has accomplished much less than hoped. After factoring out the sales tax increase, February consumer price inflation levels registered at zero percent year-over-year, while internal demand indicators remain stagnant. Recent concerns over liquidity in the Japanese government bond markets is being undermined by the increasingly large portion of securities outstanding held by the bank are another headache for Kuroda and his colleagues. After the recent public statement by People’s Bank of China governor Zhou Xiaochuan that the bank stands ready to act to fight deflation, Friday’s inflation data release from the country’s National Bureau of Statistics will likely be subject to a “bad news is good” interpretation by investors.
Monday, April 6: With multiple markets in Europe closed for Easter Monday and the Ching Ming holiday in China, it will be a light day for international economic data releases. In the U.S. final Institute for Supply Management nonmanufacturing data will be released with consensus forecasts that service sector activity will remain unchanged.
Tuesday, April 7: The Reserve Bank of Australia’s monthly rate announcement will be closely watched after RBA governor Glenn Stevens surprised markets by holding firm on rates in March. Final March service sector and composite purchasing managers’ index data for the primary European economies will be released, as will March producer price index levels for the common currency area. In the U.S., outstanding consumer credit for February is expected to indicate expansion centered once again on the nonrevolving category, particularly student debt.
Wednesday, April 8: The Bank of Japan monetary policy statement and ensuing press conference will grant Bank governor Haruhiko Kuroda the chance to address concerns over the massive ongoing quantitative easing program. In Europe, February trade data and March retail sales will be the primary releases. Weekly Energy Information Administration crude oil stockpile data will be issued in the U.S. The primary economic focus for U.S. dollar-denominated markets, however, will be the release of notes from the most recent Federal Open Markets Committee meeting, potentially providing further insight into the Federal Reserve’s plans for eventual rate normalization. Earnings season gets underway after equity markets close with the release of first-quarter results by global aluminum giant Alcoa. The company, which suffered from weaker commodity demand from developing markets in recent quarters, has announced an ambitious $5 billion expansion plan for its aeronautical division.
Thursday, April 9: The Bank of Japan’s monthly economic survey results will be released, as will March machinery order data for the island nation. Meanwhile final trade and industrial production figures for February for Germany are scheduled to be announced. Likely the primary economic data point in Europe for the day, however, will be the Bank of England’s monthly rate decision. In the U.S., January wholesale inventories will be announced, as will initial weekly jobless claims.
Friday, April 10: The Bank of Japan is publishing monetary supply and bank lending data. China’s National Bureau of Statistics will release March consumer and producer price index levels for China. In light of recent public discussions of further easing measures by senior officials from the People’s Bank of China and weakness in prices may be a bullish signal for markets anticipating central bank intervention. Industrial output data for March will be announced on either side of the English Channel, with forecasts for factory activity in the U.K. to exhibit greater strength than that in France.
