Even if the Central Banks chaos is out of the way for now, there is a heavy calendar of Central Banks speeches ahead. So far the market continues to worry about the stability of the financial system and question growth and demand outlooks as central banks remain focused on fighting inflation. The inflation risks remain tilted the upside, uncertainty remains high and the CBs stress the data-dependency of future decisions, though the chances of June rate hikes are clearly increased.
Monday – 15 May 2023
Eurogroup Meetings (EUR, GMT 12:00) Empire State Manufacturing Index (USD, GMT 12:30 ) – The Empire State index is expected to drop to -5.0 in May from 10.8 in April, versus a deep 2-year low of -32.9 in January and a 43.0 all-time high in July of 2021.
Tuesday – 16 May 2023
RBA Minutes (AUD, GMT 01:30 ) – The RBA minutes should provide guidance on the pace for further aggressive rate hikes to quell still very elevated inflation rates.Average Earnings Index, Claimant Count & Unemployment Rate (GBP, GMT 06:00) – The UK Index earnings plus Bonus is expected at 5.1% in March from 5.9%. Unemployment rate should be steady at 3.8%.German ZEW (EUR, GMT 09:00) – The key topic for the Eurozone’s biggest and most important economy. Data is expected to show May’s ZEW economic sentiment contracting further at -35.3 from -32.5.Retail Sales (USD, GMT 12:30) – The April Retail Sales is anticipated to gain by 0.5% for the headline and 0.2% ex-autos, after respective March drops of -0.6% and -0.4%. Energy-led price declines have depressed nominal sales since Q2 of 2022, but we expect a 2% April bounce for the CPI gasoline index that will bolster gasoline sales. ECB President Lagarde Speech (EUR, GMT 14:00) Consumer Price Index & Manufacturing Sales (CAD, GMT 12:30) – Canadian core inflation data in April is expected to be confirmed at 4.4% y/y from 4.3% y/y. Manufacturing Sales is seen unchanged at 0.5% m/m. FOMC Member Williams speech (USD, GMT 16:15) Gross Domestic Product (JPY, GMT 23:50) – The prel. Q1 GDP growth should show a growth boost to 0.7% y/y from 0.1% y/y.
Wednesday – 17 May 2023
Wage Price Index (AUD, GMT 01:30) – Australian wages growth is expected to rise to 0.9% from 0.8% for Q1. This could provide direction for the RBA as a rising number could support a further hawkish stance from the bank.Consumer Price Index & Core (EUR, GMT 09:00) – The Eurozone inflation rate in April should ease at 0.7% m/m from 0.9% m/m, while the headline inflation is anticipated to rise at 7.0% y/y from 6.9% y/y and core at 5.6% y/y from 5.7% y/y.BoE Governor Bailey speech (GBP, GMT 09:50) Building Permits & Housing Starts (USD, GMT 12:30) – Housing starts are expected to fall -0.7% to a 1.410 mln pace in April from 1.420 mln in March, versus a 3-year low of 1.321 mln in January. Permits are expected to be steady at 1.430 mln from March, versus a 3-year low of 1.337 mln in December. Pending home sales fell -5.2% in March after a 0.8% increase in February.Crude Oil Inventories & Cushing Crude Oil Inventories (USOIL, GMT 14:30)
Thursday – 18 May 2023
Employment data (AUD, GMT 01:30) – Australian employment change should grow by 15K from the contraction seen in December at -14.6K, while the unemployment rate should be unchanged at 3.5% m/m.Philly Fed Index (USD, GMT 12:30) – The Philly Fed index is expected to improve to -20.0 from a 3-year low of -31.3 in April, versus a 48-year high of 50.2 in April of 2021. The various producer sentiment measures have fallen substantially into 2023 from remarkably lofty peaks for most measures in November of 2021, with many of the various component categories now in contraction territory.New and Existing Home Sales (USD, GMT 14:00 ) – The new and existing home sales figures have fallen sharply since Q1 of 2022 in the face of elevated mortgage rates and recession fears, though mortgage rate declines since October will provide some lift to the housing measures in 2023. Elevated home prices despite the price pull-backs since Q2 of 2022 have supported starts and permits despite the high mortgage rates, as homes remain in short supply. We expect a 1.403 mln average for starts in Q2 after a 1.395 mln Q1 clip. We expect a 1.440 mln average for permits in Q2, steady from Q1.
Friday – 19 May 2023
Retail Sales (CAD, GMT 12:30) – March Retail Sales are expected to contract by -0.6% m/m from -0.2% m/m and core at -0.1% m/m from 0.7% m/m.FOMC Member Williams speech (USD, GMT 12:45) FED Chair Powell speech (USD, GMT 15:00)
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Andria Pichidi
Market Analyst
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