Starting Monday, the forex market will see a relatively light day in terms of scheduled economic events. Tuesday brings a flurry of activity with the release of flash manufacturing and services PMI data for various countries, including Japan, France, Germany, the Eurozone, the United Kingdom and the United States. Additionally, the United States will release data on new home sales and the Richmond manufacturing index.
On Wednesday, the focus will be on Australia for inflation data, while in the United States the focus will be on core durable goods orders m/m and durable goods orders m/ mr. The Bank of Canada will also publish its summary of the deliberations.
Thursday will see the release of advanced data for quarterly GDP, jobless claims and pending home sales m/m in the United States.
Friday will take place the most anticipated event of the week: the announcement of the monetary policy of the Bank of Japan. In addition, the President of the Swiss National Bank, Jordan, will speak at the SNB General Meeting of Shareholders in Bern. Although his remarks are not meant to influence the market, he is known to sometimes make statements that surprise the market. Traders will closely monitor his speech for any mentions related to inflation and future rate cuts.
In the United States, key data released on Friday include the core PCE price index m/m, personal income m/m, personal spending m/m, revised consumer confidence in the UoM and expectations of revised inflation rates for the UoM. The consensus is that U.S. new home sales are expected to increase from 662,000 to 668,000. New home sales have increased over the past year thanks to price incentives given to builders and a strong housing market. ‘job. High mortgage rates and affordability have put pressure on the pace of sales and prices, with new home prices falling to just 3% more than existing homes.
Last month, new home sales fell slightly, but an improvement is expected in March data. According to Wells Fargo analysts, “a structural deficit of available single-family homes as well as the ability of builders to close the affordability gap through pricing incentives should support sales this year, even as mortgage rates have risen.” these last weeks “.
The market expects headline CPI data for Australia to remain around 3.4%, which is just above the RBA’s target of 2-3%, and that the The CPI m/m is likely to increase by 0.5%. From a policy perspective, the Bank is likely to wait for more data before cutting interest rates, but if the CPI is below consensus, that could fuel rate cut expectations.
The U.S. economy and jobs market have performed robustly recently, but signs of moderation may be on the horizon as GDP growth is expected to slow in the coming months. Although consumer spending remains strong, challenges such as high interest rates and slower real income growth could dampen economic momentum going forward. For this week’s edition, the consensus on the progress of q/q GDP is a drop from 3.4% to 2.5%.
The BOJ is expected to keep its policy target unchanged, but traders should watch its quarterly outlook report. Analysts expect an upward change in the inflation outlook due to high wages and the recent depreciation of the yen. Expectations of another rate hike from the BoJ will increase as the year progresses.
In the United States, the consensus for the core PCE m/m price index is for a 0.3% rise, the same as last month. Personal income m/m is expected to increase by 0.5% (previously 0.3%) and personal spending m/m is expected to increase by 0.6% (previously 0.8%).
The increase in consumer spending in February, particularly in services, highlighted the resilience of American consumers. However, inflationary pressures have offset some of the strong increases in wage income.
While spending is expected to remain strong in March, supported by rising retail sales, the challenge is balancing income gains with persistent inflation. As the year progresses, the impact of persistent inflation on real income and consumer spending is expected to become more pronounced, which could dampen economic momentum.
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