What’s ahead this week for markets? A lot of headaches, in addition to the usual flow of reports and data.
US quarterlies and retail sales data, Australian jobs, inflation reports, exploration and production quarterlies, Chinese GDP, production, investment, and retail sales.
But markets will now be watching for two issues: anything remotely inflationary, which brings us to oil prices (and gas in Europe), and the much-rumored Iranian retaliation against Israel, and Israel’s very clear threat of a counter-retaliation, which will make a lot of investors, traders, and governments very nervous this week.
All those hard-won gains on inflation are looking more and more like they will be frittered away by the Gaza war and Iran’s central role in opposing Israel and financing drone and missile attacks on shipping in the Red Sea.
Energy prices are rising, especially oil and petrol, and this feeds back into inflation, no matter if they are not included in core inflation readings watched by central banks.
Australia sees the March jobs figures on Thursday. AMP Chief Economist, Shane Oliver, sees a fall of 15,000 in new jobs (after February’s big rise of 116,500 people). He also sees the jobless rate rising back to 3.9% from 3.7%.
He says this will be mostly due to the changing nature of jobs at the start of a year and changes to seasonal adjustment factors.
This week also sees the release of quarterly reports from big miners Rio Tinto (first quarter) and BHP (3rd quarter) and Evolution Mining (third quarter as well).
Bank of Queensland is due to release its half-year report on Wednesday.
In the US, there’s the second week of the March quarter reports – watch for Netflix midweek.
The AMP’s Shane Oliver thinks the season will be a bit better than expected:
“The March quarter earnings reporting season will also start to pick up pace with consensus earnings expectations currently around 4% yoy, but with another upside surprise likely on the back of strong March quarter economic growth and early reporters coming in well above this,” he wrote at the weekend.
March retail sales data will be out tonight (with a small rise forecast but cooler than February’s 0.6% jump, according to Moody’s economists).
Chinese March quarter GDP data will be released tomorrow, and Dr. Oliver says the figure will come in around 1.6%, a bit faster than the 1% in the December quarter. Other forecasts are around 1% to 1.2% for the quarter.
He says annual growth should slow to an annual rate of 5% from 5.2% because of base effects.
“March data is expected to show growth in industrial production slowing to 6% yoy and retail sales slowing to 5% yoy.”
And in Japan, March CPI inflation on Friday is expected to rise to 2.9% yoy (from 2.8%) but with core inflation slowing to 2.3% yoy (from 2.5%), according to Dr. Oliver. Inflation reports will be released in the eurozone, the UK, and New Zealand (on Wednesday for the latter).