Below are the most important global events likely to affect FX and bond markets in the coming week starting Monday April 1.
The start of a new quarter is set to be relatively quiet due to holidays on Monday across much of Europe and some parts of Asia. U.S. monthly jobs data will likely be the highlight of the week as investors anticipate that the Federal Reserve will cut interest rates over the coming months, while in Europe investors will pay close attention to German inflation figures.
In Asia, attention will focus on PMI readings for over 10 countries, including China and Japan, a central bank decision in India, and meeting minutes and speeches from Australia’s central bank. Inflation prints from the Philippines, Indonesia, Thailand and South Korea also feature.
U.S.
U.S. monthly jobs data for March due on Friday will be watched closely, with non-farm payrolls growth expected to fall following a 275,000 rise in February. A particularly weak reading could see the dollar and U.S. Treasury yields fall while equities rise.
The Federal Reserve confirmed at its meeting in March that interest-rate cuts are on their way and reiterated its forecast for three rate cuts this year. Most expect a first rate cut to come in either June or July, with U.S. money markets currently only fully priced for a July cut. The exact timing will likely depend on the extent to which inflation and jobs growth slow.
“We continue to expect the pace of job growth to slow in the coming months,” analysts at Citi said in a note, adding that they expect payrolls growth of 100,000-150,000 in March.
Ahead of this data, investors will look for further clues on the health of the U.S. labor market via ADP private payrolls data for March on Wednesday, JOLTs job opening figures on Tuesday and weekly jobless claims on Thursday.
Other data to watch will be the ISM manufacturing and services PMI readings on Monday and Wednesday respectively, U.S. February factory orders on Tuesday and U.S. February trade data on Thursday.
CANADA
Canadian jobs data for March released on Friday will be watched as a gauge of when the Bank of Canada will start cutting interest rates.
Recent data for February showed a second consecutive surprise deceleration in Canadian inflation, which led economists and traders to ramp up expectations that the Bank of Canada would begin cutting its policy rate, now at 5%, in June.
The jobs data will be watched in the context of recent comments by Deputy BOC Governor Toni Gravelle, who cautioned that inflation figures were a single data point, and that senior officials will “try to understand what it means in aggregate across previous consumer-price index numbers and other macroeconomic data.”
Canadian trade data for February are also due for release on Thursday.
EUROZONE
The European Central Bank is expected to start cutting interest rates in either June or July. The timing of this, plus how fast and how far rates will fall after that, will depend on how quickly inflation falls and on how healthy the economy is.
The provisional estimate for German inflation in March due on Tuesday is likely to attract the biggest focus of the week. Headline annual CPI inflation is expected to fall further toward the ECB’s 2.0% target, though policymakers are keeping a particularly close eye on core inflation, which strips out volatile items such as food and energy and has remained stubbornly high of late.
“The last mile in the disinflation process that lies ahead of us is likely be relatively bumpy, not least because one-off/temporary factors are set to affect the CPI inflation dynamics in the near term,” Deutsche Bank senior economist Sebastian Becker said in a note.
Provisional March inflation figures for the Netherlands will be released on Wednesday, while eurozone producer prices data for February on Thursday will give clues on pipeline inflationary pressures.
On Friday, eurozone retail sales, German manufacturing orders and French industrial production–all for February–will be watched for indications on whether the eurozone’s tentative recovery is gaining traction. Final purchasing managers’ surveys for the eurozone and for individual eurozone countries will also be released for manufacturing on Tuesday and for services on Thursday.
Eurozone bond issuance will include Germany conducting a two-year Schatz auction on Tuesday and a 10-year Bund auction on Wednesday, while Spain and France will sell bonds on Thursday. In Scandinavia, Denmark will hold an auction on Wednesday.
U.K.
In an otherwise quiet week for U.K. data after the long Easter weekend, U.K. mortgage lending and credit data for February on Tuesday will be watched to…
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