Events to Look Out for Next Week

• German IFO (EUR, GMT 08:00) – The German IFO business reading is expected to decline slightly to 93.2 in April after it jumped to 96.6 in March.
• Durable Goods (USD, GMT 12:30) – The Durable Goods orders are expected to surge 3.0% in March with a 7.0% increase in transportation orders, after a -1.2% headline decrease in February that included a -1.8% transportation orders drop. The durable orders rise ex-transportation is pegged at 1.0%, after a -0.9% February drop. Boeing orders surged to 196 planes from 82 in February, and a lofty 90 in December with the lifting of the 737 MAX grounding.

Tuesday – 27 April 2021

• Interest Rate Decision, Statement and Conference (JPY, GMT 03:00) – In the last meeting, the BoJ widened the target band under its yield curve control policy and removed explicit targeting on ETF purchases, giving the central bank room to draw in stimulus. We continue to expect that the yen will retain an overall softening bias, with JGB yields to remain relatively rooted to US Treasury and other sovereign yields.

Wednesday – 28 April 2021

• Consumer Price Index (AUD, GMT 01:30) – The final Q1 CPI for Australia is expected to show 0.7% y/y gains.
• Retail Sales (GBP, GMT 12:30) – Retail Sales for February are expected to contract further by -3.3% m/m, compared to -1.1% in January.
• Interest Rate Decision, Statement and Conference (USD, GMT 18:00-18:30) – The FOMC is due to meet on Wednesday but no changes are expected. The FOMC didn’t make any big changes in its policy stance at the March 17 meeting, in terms of rates and QE. The statement expected that the policy will remain accommodative. Overall policymakers will re-affirm there will be no shift in stance until “substantial further progress” despite the economy re-opening, jobs increase and rising inflation.

Thursday – 29 April 2021

• Harmonized Index of Consumer Prices (EUR, GMT 12:00) – German HICP inflation confirmed at 2.0% y/y. Data were in line with the preliminary report and thus expectations and the uptick in headline rates from February was mainly due to base effects from energy prices. The German stats office once again flagged problems with data collection in the pandemic as shops and services remain restricted and price collection is not always possible.
• Gross Domestic Product (USD, GMT 12:30) – The preliminary estimates call for growth rates of 5.6% in Q1 and 8.5% in Q2. Two rounds of fiscal stimulus and the distribution of vaccines during Q1 should provide a sharp lift to consumption growth through the first half of the year, while residential and business fixed investment extend their rapid climb. Stimulus legislation also shored up state and local government finances, leaving what we assume will be a flat 2021 trajectory for real government purchases. Trade growth stalled in Q1 before a likely rebound into Q2, thanks to a big February hit from bad weather, but we expect net export subtraction from GDP in both quarters as imports rebound more rapidly than exports.

Friday – 30 April 2021

• Manufacturing PMI (CNY, GMT 01:00) – The NBS Manufacturing PMI is expected to remain close neutral at 51.2.
• Gross Domestic Product (EUR, GMT 06:00) – Markets are positioned for a negative Q1 GDP print, so the renewed correction in the production of investment goods in particular doesn’t really change the overall picture and the real question is whether the improvement in sentiment reflected in March PMI readings can be sustained in the light of virus developments, both in Germany and Eurozone as a whole.