What To Watch Across Markets This Week: 1st April 2024

Last week's highlight was Personal Consumption Expenditures (PCE), the Fed's favorite inflation gauge. Both headline and core PCE decelerated as expected, increasing by 2.8% YoY and 0.3% YoY compared to previous figures. The reading's effect has yet to translate into the markets closed for the Good Friday holiday. Last week's data could indicate that the Fed is ready to begin its easing cycle as soon as June, with projections of three rate cuts this year. 


This week, markets will be awaiting U.S. employment data on Friday to confirm a soft landing by the U.S. economy. The market also anticipates the Japanese government's intervention in the yen, and finally, inflation data for Europe will be released. 


Monday: 01-04-2024

China's Caixin Manufacturing PMI was released earlier today, showing that the industry is expanding amid a housing crisis, weakening global demand, and hiking local government debts. This was in line with the official factory survey showing an expansion for the first time in half a year, recording 51.1, its fastest pace in over a year. Business confidence also hit an 11-month high, fueled by an increase in new orders from domestic and international clients, a poll published on Monday.


Despite the PBOC's persistent efforts to stabilize the currency and recent data showing the economy is recovering, the dollar, which remained close to six-week highs, put pressure on China's yuan on Monday.

The ISM Manufacturing PMI will be released today at 18:00 GMT+4. The sector is expected to have performed better in March but was still below the 50 mark. Today's reading is expected at 48.5 compared to a previous of 47.8. 


Tuesday: 02-04-2024

CPI data in Germany, Europe's biggest economy, will be released at 16:00 GMT+4, expected to show inflation rising at a faster rate in March. Forecasts point to a CPI reading of 0.6% MoM, higher than the previous 0.4%. However, markets expect inflation to decelerate on an annual basis, with forecasts of 2.2% YoY compared to 2.5% previously. Germany's report will be a leading indicator of Europe's data, which will be published later this week. 


JOLTs Job Openings data will be released at 18:00 GMT+4. Markets expect the number of vacancies to decline from 8.863M to 8.79M in March. According to analysts, a higher than expected generally supports the USD and vice versa. 


Several FOMC members will also be talking on Tuesday. Investors will closely watch their talks to decipher the tone for the next FOMC meeting. 


Wednesday: 03-04-2024

Wednesday marks a big day for Europe. CPI will be released at 13:00 GMT+4 (Dubai Time). Inflation is expected to ease in Europe both on a monthly and annual basis. Core and headline CPI are expected at 3% YoY and 2.5% YoY compared to previous figures of 3.1% and 2.6%, respectively. A rate cut in June is unlikely if inflation is higher than expected. ECB Governing Council member Robert Holzmann said on Saturday that the ECB could start cutting its key interest rate before the Fed, pointing out that the European economy was growing at a slower pace than its U.S. counterpart.


The ADP Nonfarm Employment Change for March will be released at 16:15 GMT+4. The ADP National Employment Report measures the monthly change in nonfarm, private employment based on the payroll data of approximately 400,000 U.S. clients. It is a leading predictor of the government's nonfarm payroll report. Analysts explain that a higher-than-expected reading may be positive for the USD and vice versa. Markets are now expecting the U.S. economy to land softly as the Fed upgraded its outlook for economic growth in its previous March meeting. 


Another important piece of data for the U.S. is the ISM Non-Manufacturing PMI, due to be released at 18:00 GMT+4. Manufacturing PMI is also expected to have slightly expanded from 52.6 to 52.7. 

Moreover, Fed Chair Powell will speak at Stanford's Business, Government, and Society Forum at 20:10 GMT +4. Investors will be closely watching out for hints on his outlook on the U.S. economy. 


Thursday: 04-04-2024

The Initial Jobless Claims for March will be released at 16:30 GMT+4, expected to have increased to 214K from a previous 210K. A higher-than-expected reading may be negative for the USD and vice versa, analysts explain.


Overall, the week ahead is full of important indicators that will impact upcoming rate decisions across the major economies. However, expectations point to the global economy ultimately emerging from a difficult few years due to the pandemic's lingering effects and geopolitical unrest in East Europe.


Friday: 05-04-2024

All-important Nonfarm Payrolls data is due for release at 16:30 GMT+4 (Dubai Time). The data is expected to have declined to 205K from a previous figure of 275K. Nonfarm Payrolls measure the change in the number of people employed during the previous month, excluding the farming industry. It is a leading indicator of consumer spending, which accounts for more than 60% of the U.S. GDP.


U.S. Unemployment Rate data is also due for release at the same time. It is expected to have remained unchanged at 5.9% in March.




The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.