Week Ahead 19th – 23rd May




The upcoming week is one of the lighter weeks on the economic data front which will allow investors to focus on central banks as they release meeting minutes. Most major central banks are due to release during the week, Fed, BoE and the RBA. The only major central bank not releasing minutes is the ECB but that will not keep it out of investor’s minds as speculations mounts as to what stimulus measures they implement in their June meeting. In terms of economic data this week, there is not a lot to look forward to, there are some key releases that are worth keeping a look for. These include the Chinese HSBC flash manufacturing PMI, UK retail sales and the euro-zone PMI readings.

What to keep a watch for.

Germany: Bundesbank monthly report.

April German PPI: German producer prices are forecast to drop by 0.9% year-on-year, the same as in the previous month.
April UK CPI: Price growth in the UK is expected to accelerate to 1.7% from 1.6%.

Bank of England minutes: no change was announced by the bank at its last meeting, but since then we had the inflation report that had more dovish tone. Watch out for comments on slack in the economy and debate on how strong the economy really is. April UK retail sales: Year-on-year sales growth (including motor vehicles) is expected to touch 5.1% from 4.2% last month, a significant move.
U.S. Federal Reserve minutes: Janet Yellen has been keeping very quiet over the subject of interest rate rises. The focus will be on the weight of opinion on the committee about when an increase would be appropriate.

May Chinese HSBC manufacturing PMI: The previous month’s figure was 48.1, and we expect this to improve to 48.4, although this is still in contraction territory.
May Eurozone PMI data: This batch of indicators from the euro-zone is broadly expected to be slightly weaker.
Q1 Revised UK GDP: No change is expected to the first revision, with quarter-on-quarter growth of 0.8% and year-on-year growth of 3.1%.
U.S. weekly jobless claims: These hit a seven-year low last week, down 24,000 to 297,000. May Markit manufacturing PMI: A slight improvement is expected here, from 55.4 to 55.5.
April existing home sales: The month-on-month rate is expected to increase rapidly to 2.2% from 0.2%, with 4.69 million being sold this month, up from 4.59 million last month.

Q1 Final German GDP: No revision is forecast for German economic growth, which should stay at 0.8% for the quarter-on-quarter figure and 2.3 for year-on-year. May German IFO: These sentiment

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