Market movers ahead
- The US employment report is released on Good Friday. Following a run of months with very strong job gains we expect the pace of labour market improvement to moderate but remain healthy. We expect overall job growth at 230,000 in March.
- On Monday next week, we are due to get the March manufacturing ISM index. We expect the ISM to take a small dip to 52.0.
- The minutes of the 17-18 March FOMC meeting are due to be released on Wednesday 8 April
- In the euro area, we expect HICP inflation to increase from -0.3% y/y in February to -0.1% in March.
- German factory orders were quite weak in January and we expect some normalisation in February, forecasting an increase of 3.0% m/m after it declined 3.9% m/m in January. On the other hand, German industrial production has been on a clear uptrend and in January it increased for the fifth month in a row.
- In the UK in the coming two weeks, the Monetary Policy Committee will hold its April meeting. We expect the Bank Rate and the stock of purchased assets to remain unchanged at 0.50% and GBP375bn, respectively.
- In China, the most important event next week will be the official manufacturing PMI. We expect PMI to decline to 49.4 in March from 49.9 in February. We expect the increase in Chinese CPI to stay unchanged at 1.4% y/y in March.
- In Japan, next week’s main events are industrial production for February on Monday and the Bank of Japan’s (BoJ) Tankan business survey for Q1 on Wednesday.
Global macro and market themes
- Europe continues to deliver good news – other regions disappoint.
- Still positive on risk assets based on global recovery and ample liquidity.
- Time to add to periphery bonds.
- Limited upside to oil price as oil glut remains.
- EUR/USD to go lower after correction.
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