Coffee break

Preliminary number of US building permits, existing home sales, and mortgage applications will be published, shedding some light on the strength of the real estate market. Final inflation readings for March, PPI and CPI in Europe, Canada and Japan will complete a picture of price trends while the US, UK and China’s retail sales will likely confirm a further expansion. The US Federal reserve bank’s Beige Book will be released and the IMF World bank will gather for its Spring Meeting. Its managing director already warned against the height of debt and depleted fiscal buffers. Netflix, Procter & Gamble, Johnson & Johnson and American Express will release their Q1 2024 financial results as we get into the thick of the season.

Investors will focus on central banks’ reaction function: the European Central Bank meets, likely further cementing expectations for a rate cut at the next meeting on 6 June.

Investors will focus on preliminary inflation data for March in the euro zone. Ongoing disinflation and positive surprises on economic growth, a goldilocks environment may emerge.

In the US, final numbers on GDP growth, jobless claims, core PCE prices, home sales and sentiment will contribute to giving a fuller picture of the Goldilocks environment. Consumer and business confidence surveys are due in the Euro Area, and fresh inflation numbers for France, Spain and Italy will give early insights into price trends in March.

Investors will closely monitor the Federal Reserve's decision and communication regarding potential rate cuts, particularly in light of last week's high inflation data. Also the Bank of Japan and the Bank of England will hold meetings. While not much is expected from the UK, the BoJ is at the crossroads with some hawkish comments from BoJ officials and inflation and Yield Curve Control data.

Central banks will be in the spotlight as the ECB and the Bank of Canada are expected to keep rates unchanged while Jerome Powell’s testimonies to Congress and the US Fed’s Beige Book will offer a snapshot of economic developments.

ECB President Christine Lagarde’s speech and preliminary February data on the euro zone inflation will help investors weigh the odds of the ECB cutting rates prior to the Fed.

Large parts of Asia will celebrate the Lunar New Year of the Dragon. In a timely manner, Chinese policymakers rolled out policy easing to defend markets and growth.

The Fed will release its quarterly Senior Loan Officer Opinion Survey. The document helps assess lending standards to households and businesses.

Over the next 5 trading days, markets will work through the busiest week of the earnings season, as 108 companies representing 38.3% of the S&P 500’s market cap will report results, including Apple, Microsoft, Alphabet, Amazon, Meta, ExxonMobil, Mastercard, and Merck.

The New Hampshire primary follows the Republican caucuses in Iowa, where former President Donald Trump won decisively. Other candidates, including Ron DeSantis and Nikki Haley, are eager to showcase the ongoing strength of their campaigns.

The Iowa caucuses, which have served as the lead-off voting process in presidential elections since the 1970s, marks the kick off of the US election year.

On the data front in the US, December headline CPI is expected to marginally pick up while core inflation should confirm its downtrend. Barring an unexpected shock, we expect inflation at both sides of the Atlantic to end 2024 in shouting distance of central bank targets.

2024 should bring better visibility for investors as the inflation/interest rate shock fades away and central banks will likely use the room for manoeuvre to reduce rates.

The main focus will be on several central banks gathering for their final meeting of the year, notably the Fed, the ECB, the SNB and the BoE. The press conferences should help investors to schedule the start of the monetary easing cycle in 2024.

The US job report will be in the spotlight. The US labour market is gradually cooling as the unemployment rate is creeping up.

Fed Chair Jerome Powell, ECB President Christine Lagarde and BoE Governor Andrew Bailey will hold speeches, giving more insights into their respective guidance into the final meetings of the year.

Early estimates of manufacturing and services business activities for key countries, such as the US, the euro zone, Great Britain, and Japan will reveal whether economies are softening. Sentiment gauges in the euro zone and the US will give clues on the consumer mood just at the start of the holiday season sales.

US inflation will be in the spotlight with the publication of key figures, such as core inflation rate, CPI and PPI.

Markets will continue to digest the slowdown in the US job market, as the unemployment rate continued to creep higher, from 3.4% in April to 3.9%.

Fed’s next rate decision on November 1st will be in the spotlight. The central bank is widely expected to keep rates unchanged, but may be hesitant to indicate if it is done hiking for good after this week’s strong GDP reading.

The meeting of the European Central Bank will be in the spotlight. The broad consensus is calling for a standby, but oil prices and labour market strength keep upside risks to inflation alive.

Inflation data will be in the spotlight with publications from the US, China and the euro zone. The Chinese PPI may confirm the slowing deflationary pressures.

The US start the last quarter of 2023 with a government shutdown. One of the casualties is government data.

Financial markets will continue to digest the remaining round of central bank meetings, including the latest one from the Bank of Japan.