Events to Look Out for Next Week

• Trade Balance (JPY, GMT 23:50) – The trade balance is expected to surplus in March to 490 bln from the surplus of 215.9 bln in February.

Tuesday – 20 April 2021

• PBoC Interest Rate Decision (CNY, GMT 01:30) – The People’s Bank of China (PBoC) is expected to continue to maintain flexibility in the exchange rate, stabilize market expectations, and keep the Yuan basically stable at reasonable and balanced levels.
• RBA Rate Meeting Minutes (AUD, GMT 01:30) – Governor Lowe in the last meeting noted in the central bank’s statement that the exchange rate “has appreciated and is in the upper range of the recent year,” which was taken by markets as signalling a level of disquiet about the exchange rate, albeit a somewhat half-pied one.
• Employment change & ILO rate (GBP, GMT 06:00) – UK Employment change is expected to dip to -167k in the three months to February. UK ILO unemployment is expected higher at 5.1% in the three months to February.
• Consumer Price Index (NZD, GMT 22:45) – The final Q1 CPI for New Zealand is expected to show 1.0% y/y gains.

Wednesday – 21 April 2021

• Consumer Price Index and Retail Sales Index (GBP, GMT 07:00) – UK inflation data is anticipated to jump to 0.8% y/y in March, from the 0.4% y/y in February. The core inflation is expected above the current headline rate – at 1.4% y/y from 0.9% y/y. Retail Sales are seen at 1.6% y/y in March from 1.4% y/y last month.
• BoE’s Governor Bailey speech (GBP, GMT 10:30)
• Consumer Price Index (CAD, GMT 12:30) – The CPI inflation edged up to a 1.1% annual growth rate in February from the 1.0% pace (y/y, nsa) in January, coming in a bit below expectations but in line with estimates. Inflation is expected to remain below target throughout the projection horizon, with March readings at 0.7% m/m and 1.3% y/y.
• Interest Rate Decision and Statement (CAD, GMT 14:00) – The BoC is expected to hold rates steady at 0.25% as its extraordinary forward guidance remained in place as anticipated. BoC maintains the low for long policy pledge, reiterating that the economy will “continue to require extraordinary monetary policy support.” The inflation projection implies no moves on rates until 2023. Moreover, employment remains well below pre-pandemic levels. Overall, the BoC joined the Fed and RBA in pushing back against growing tightening expectations in the markets.

Thursday – 22 April 2021

• Interest Rate Decision, Statement and Conference (EUR, GMT 11:45-12:30) – ECB officials continue to downplay the recent rise in headline inflation numbers. Reflation trades have left the ECB trying to slow the ascent in yields, and officials have been busy stressing that they will continue to provide monetary support for as long as necessary. Executive Board member Panetta added his voice to the increasingly vocal dovish camp at the ECB, which seems to already be positioning already for an extension of the central bank’s pandemic emergency purchase program (PEPP). With clarity on the reaction function and very little news on economic and inflation development since the last meeting, next week’s meeting should be an unexciting one.

Friday – 23 April 2021

• Markit PMI Composite (EUR, GMT 07:30 – 08:00) – The April prelim. composite figure is expected to show the slowdown remaining very weak to just 49.1 from 53.2. Of the big three Eurozone countries only the German PMI has both manufacturing and services above the 50 point no change mark in March, reflecting a tentative re-opening of parts of the sector. The April prelim. composite figure in Germany is expected to decline in 51.6 from 57.3 due to a slip in services even though manufacturing has stayed above 60. The slowdown is expected to remain very weak to just 49.1 from 53.2. PMI survey compiler Markit suggested that the services sector has started to adapt to the changed environment and is better able to deal with the ongoing restrictions. However, while export demand and spillover effects from the stimulus fueled recovery in the US will keep the manufacturing sector underpinned across the Eurozone as well, services and consumer confidence remain the weakest link.
• UK Services PMI (GBP, GMT 08:30) – In the UK, the March surveys were very strong. The Services PMI was revised down to 56.3 from 56.8, but that still meant activity in the sector is expanding again after four consecutive months of contraction. This was the first month since last September that both the manufacturing and services sectors have seen a rise in new orders.