Events to Look Out For Next Week

• Composite Markit PMIs (EUR, GMT 08:30-09:00) – Both manufacturing and services March PMIs are expected to have dropped, leaving the composite at 51.0, down from 51.6 in the preliminary release for March. In Germany meanwhile, Manufacturing PMI should have contracted to 40 from 48.0.
• US PMIs (USD, GMT 13:45) – The Manufacturing PMI is expected to have decreased to 50.0 in March, compared to 50.7 in February, while the Services PMI is expected to have slowed to 48.8.
• New Home Sales (USD, GMT 14:00) – We expect a -4.5% drop for new home sales to a 730k pace, after a surge to a 764k rate in January that eclipsed a 12-year high. All the home sales statistics accelerated through 2019, and we expect this resurgence to extend through Q1. We’ll face a hit to the housing transactions data in Q2 from COVID-19.

Wednesday – 25 March 2020

• Interest Rate Decision and Statement (NZD, GMT 01:00) – The RBNZ next meets on March 25. The RBNZ held rates steady at the last meeting and signaled that in the central scenario there won’t be any additional easing this year, despite the virus outbreak. However, rate cuts by the RBA and Fed have ratcheted up the pressure on the bank to cut. We now expect a 25 bp cut to 0.75% this month from the current 1.00% setting.
• German IFO (EUR, GMT 09:00) – The German Business Sentiment Index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. March’s numbers are expected steady.
• Consumer Price Index (GBP, GMT 09:30) – Prices are expected to have eased in February, with overall inflation expected to stand at 1.7% y/y, and core at 1.5% from 1.6% y/y last month.
• Durable Goods (USD, GMT 12:30) – February Durable Goods orders are expected to decline further to -0.9%, following the -0.2% January loss.

Thursday – 26 March 2020

• Interest Rate Decision and MPC Voting (GBP, GMT 12:00) – The BoE was only due to meet next week, but after an emergency conference last week decided to cut its bank rate by 15 bp to a record low of just 0.10%. At the same time the bank announced that it will increase its holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by GBP 200 bln to a total of GBP 645 bln. The program will allow the BoE to print money and use it to lend directly to large companies that are issued short term bonds. The facility will start operating early next week and the BoE will be indemnified by the government for the risk of these loans
• US Final GDP (USD, GMT 12:30) – The final release of the 2019 Q4 GDP growth rate is expected to see the world’s largest economy’s economic activity to have grown by 2.2% from 2.1%. The Q4 gain translates to a 2.3% Q4/Q4 2019 rise that only slightly undershot the 2.5% Q4/Q4 increase in 2018, as there was only a modest slowdown through 2019.
• Tokyo CPI (JPY, GMT 23:30) – The country’s main leading indicator of inflation is expected to have remained at 0.6% y/y in March.

Friday – 27 March 2020

• US Personal Income (USD, GMT 12:30) – Personal Income is expected to have grown by 0.3% m/m in February, after a 0.6% increase in January, alongside a 0.3% rise in consumption that follows a 0.2% January gain.
• Michigan Consumer Sentiment Index (USD, GMT 14:00) – The March Michigan sentiment reading is forecast at 95.0, from 95.9 in the preliminary March survey from the University of Michigan.