Sharing the economic highlights of the week ahead for your diaries, Thomas Watts, Investment Analyst, abrdn Portfolio Solutions, comments on the economic data releases this week saying:
“As we approach the end of April, it seems Spring time for the markets (as well as for the weather) has yet to materialise, as a cocktail of persistent inflation and geopolitical issues take their toll on global markets. With a relatively quiet week in terms of economic data releases on the horizon, it is aptly in the land of the rising sun, where the majority of the headlines could come from.
With the Bank of Japan (BOJ) having raised rates during its last meeting for the first time since February 2007, all eyes will be on their meeting this week to see what the central bank will do next. Data showed that Japanese inflation slowed down in March but underlying inflationary pressures are still very much alive. A pause at this week’s meeting is widely expected, leading markets to focus more attention towards the bank’s quarterly outlook report.
It is widely expected that the BoJ to revise up its inflation outlook, which is now expected to show core inflation at 2%. This will be an important factor for investors when determining when and how much interest rates could be raised by the world’s third largest economy going forward.
There is plenty happening around the rest of the world to give us a steer on how companies are seeing the global economy as Tuesdays sees a mass of Purchasing Manager’s Index (PMI) readings released. Covering both the Manufacturing and Services sectors for Germany, France, an overall European composite, the UK and US. The readings will give us an invaluable sense of the global economy at a company level as businesses will be asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories.
The end of the week will be wrapped up in the US with monthly Core PCE Price Index numbers released. Predicted to make quite the impact on the markets after its release, the data differs from normal inflation readings in that it only measures goods and services targeted towards and consumed by individuals. CPI readings also only covers out-of-pocket expenditures on goods and services purchased. It excludes other expenditures that are not paid for directly, for example, medical care which is usually paid for by insurance in the US. These are, however, included in the PCE. Adding even more importance to the figures is that the data is reportedly the preferred piece of data for the US Federal Reserve, using it as their primary inflation measure.”
