Events to Look Out for Next Week

• Retail Sales (NZD, GMT 22:45 SUNDAY) – The final Retail Sales for the first Quarter 2021 is expected to have steadied, at -2.7% q/q.
• BoJ’s Governor Kuroda speech (JPY, GMT 11:05)

Tuesday – 25 May 2021

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• Gross Domestic Product and IFO (EUR, GMT 06:00 & 08:00) –The final German Gross Producer Index for Q1 is expected to remain unchanged to -1.7%q/q and -3.3%y/y. The contraction is in fact less pronounced than initially feared and the annual rate lifted sharply while there are variations in national rates across major Eurozone countries. Meanwhile, the Business Sentiment Index for May is seen at 97.80 from 96.80. The Business Sentiment Index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany.
• Consumer confidence (USD, GMT 14:00) – Consumer Confidence is expected to slip back to 120.0, after a pop to a 14-month high of 121.7 from 109.0 in March, versus a 6-year low of 85.7 in April of 2020. This compares to an 18-year high of 137.9 in October of 2018 and a recession-low of 25.3 in February of 2009.

Wednesday – 26 May 2021

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• Interest Rate Decision, Statement and Conference (NZD, GMT 02:00-03:00) – The RBNZ is expected to hold rates steady at 0.25%. It is expected that it will repeat its  intention to keep monetary policy very stimulatory for an extended period, even if inflation pops higher in the near term. Policy guidance from the Fed, ECB and other central banks, including the RBNZ following its April policy meeting, has managed to keep yields lows while suppressing inflation fears, which has been tonic for global asset markets amid Covid vaccine concerns and more pernicious variants of SARS-Cov2.

Thursday – 27 May 2021

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• Initial Jobless Claims (USD, GMT 12:30) –Initial jobless claims are expected to fall -3k to 470k in the BLS survey week, following last week’s drop to 473k from 507k. Initial claims have turned sharply lower over the past five weeks, following a restrained drop-back through early April from the holiday peak.
• Gross Domestic Product (USD, GMT 12:30) – The Q1 GDP is expected to boost to 6.7% from 6.4%, with hikes of $11 bln for consumption, $3 bln for private construction, $2 bln for net exports, and $1 bln each for wholesale inventories, factory inventories and equipment spending. The firm Q1 GDP gain documents the updraft from vaccine distributions and two rounds of fiscal stimulus during Q1, alongside a seasonal Q1 updraft after the Q4 downdraft attributable to the mismatch of seasonal factors with this year’s disrupted holiday activities.
• Durable Goods (USD, GMT 12:30) – The Durable Goods orders are expected to bounce 1.2% in April with a 1.5% increase in transportation orders, after a 0.8% headline increase in March that included a -1.6% transportation orders drop.
• Treasury Secretary Yellen speech (USD, GMT 15:00)

Friday – 28 May 2021

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• Personal Income/Consumption (USD, GMT 12:30) – The Personal Income for April is expected to pull-back after the 21.1% March surge. The wage gain reflects a 0.5% April climb for hours-worked and a hefty 0.7% rise for hourly earnings. We expect a -42.4% April drop in “current transfer receipts” after a 95.1% March surge, as this measure tracks stimulus spending. We expect a 0.9% rise in consumption after a 4.2% March jump and a savings rate drop to 13.0% in April from a 27.6% peak in March.