Major Events of Last Week
China released its Gross Domestic Product (GDP) for the first quarter of 2016 late last week disclosing that its economy expanded by 6.7%, on an annualized basis. This result provided further evidence that the recent Chinese slowdown is now on the mend. Prominent economists summarized this development by advising that the world’s second largest economy is beginning to generate emphatic signs of stabilization epitomized by its recent impressive ‘Retail Sales’, ‘PMI’ and ‘Industrial Production’ figures. Both the Australian and New Zealand Dollars were boosted by the encouraging Chinese data.
Conjecture was rife towards the end of last week about whether top global oil producers, such as Russia, Saudi Arabia and Iran, can successfully reach an agreement this weekend capable of restricting the current excessive levels of crude output. Presently, a daily oversupply of about 2 million barrels has been directly responsible for the excessive volatility experienced by oil since the start of 2016. Traders are hoping that a positive outcome from the Doha meeting will help calm the dramatic price movements currently endured by this vital sector.
Elsewhere, the Eurozone came under pressure after the Greek debt nightmare reappeared during last week. The new primary catalysts driving this worrisome situation were bailout delays and how much help the IMF will contribute to the imminent process of restructuring a new deal. For example, Christine Lagarde, the IMF Chairperson, stressed once again last week that the Currency Bloc must now seriously consider a major reduction in Greek debt in order to provide this member state with the optimum opportunity to revitalize its stalling economy. Lagarde advised that the IMF intends to monitor developments very carefully by constantly evaluating all fresh proposals put forth by both the Eurozone and Greece.
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What to Expect This Week
No major global events or data releases are scheduled for Monday.
On Tuesday, the USA will present its ‘Housing Starts’ for last month which is expected to extend its previous result of 1.178 million units. If such a figure is confirmed, then it will add further credence to the viewpoint that house builders are starting to gain more confidence in the US economic recovery. Later, Japan will deliver its ‘Merchandise Trade’ for March. Economists are hoping for a rebound from February’s disappointing number of 242 billion Yen which was structured on annualized declines in Exports of -4% and Imports of -14.2%.
Great Britain will launch Wednesday by releasing its labor report for last month. Expert consensus is currently favoring an impressive recovery from the surprise loss of 18,000 jobs during February. The USA will next declare its second key housing statistic of the week when it discloses its ‘Existing Homes’ outcome for March. A better-than-expected result will indicate not only an improving demand within this vital trading sector but will also underpin the notion that the US economy is still acquiring impetus.
On Thursday, the United Kingdom will again commence proceedings by revealing its ‘Retail Sales’ for last month. This important indicator did not fare well at its previous showing when it posted a slump of -0.4%. A more positive result is required this time around in order for investors to regain their faith in the British economy. A pivotal event of the week will then occur when the European Central Bank (ECB) announces its latest interest rate decision and monetary policies. Although, rates should remain unchanged, the burning question will be if Mario Draghi, the ECB President, will issue any more controversial statements following those he made last month. On that occasion, he introduced a set of innovative quantitative easing actions but stunned the markets by advising that no further interest rate cuts would now be necessary.
The USA will complete the session by publishing its ‘Jobless Claims’ for the prior week ending 17th April and a premier ‘Business Outlook’ survey. The former parameter should confirm that the number of Americans filing first claims for unemployment benefits resided within the long-standing range of 250k to 290k. If the business survey can beat its previous read of 12.4, then such a figure should indicate that US factory output is starting to stage a recovery.
Eurozone is scheduled to list a spate of prominent inflationary indicators on Friday. All these PMIs should register improvements by generating numbers above their critical 50.0 marks. Canada will terminate the week by divulging its ‘Consumer Price Index’ (CPI) and ‘Retail Sales’ (RS) for March. CPI should hover about 0.2% while a RS result of 2.1% is currently the preferred prediction.
