Highlights
Germany's Gfk consumer climate index is expected to rise to minus 25.8 in May's report after a preliminary minus 27.4 in April. This index has been improving but remains historically weak.
The French INSEE sentiment indicator for the manufacturing sector is seen unchanged at 102 in April, a couple of points above its long-run average.
In the US, first-quarter GDP is expected to slow to 2.3 percent annualized growth versus fourth-quarter growth of 3.4 percent. Personal consumption expenditures, after the fourth quarter's 3.3 percent rate, are expected to rise at a 2.8 percent pace.
The US goods deficit (Census basis) is expected to deepen by $0.7 billion to $91.0 billion in March after narrowing by $0.3 billion in February to $90.3 billion.
Initial claims for the April 20 week are expected to come in at 215,000 versus 212,000 in the prior two weeks and 212,000 in five of the last six weeks. The four-week average has held at 214,500 for the past three weeks.
Wholesale inventories are expected to increase 0.3 percent in the advance report for March that would follow a sharp 0.5 percent build in February.
Pending home sales in March are expected to rise 1.0 percent on the month, after rising 1.6 percent in February and falling 4.7 percent in January.
Consumer inflation in Tokyo, the leading indicator of the national average, is forecast to decelerate further or to be little changed in April on easing food price markups after slowing in March from a jump in February, when the waning base-year effect of utility subsidies led to a much smaller fall in energy prices. Services costs are leading overall inflation as firms are raising wages at a faster pace to secure qualified workers amid widespread labor shortages.
The core CPI (excluding fresh food), closely watched by the Bank of Japan, is expected to post a 2.2 percent gain on year after increase of 2.4 percent in March, 2.5 percent in February and 1.8 percent in January. The year-over-year rise in the total CPI is forecast at 2.6 percent, unchanged from March. The core-core CPI (excluding fresh food and energy) annual rate is expected to ease further to a 16-month low of 2.7 percent from 2.9 percent.
The Bank of Japan is expected to hold the overnight interest rate target steady in a range of zero to 0.1 percent after conducting its first rate hike in 17 years and ending the seven-year-old yield curve control framework last month. The next rate hike is likely to be in July, September or October, when more evidence of a higher pace of wage hikes emerges. At their March meeting, many board members judged that the risk of Japan's economy slipping back into deflation had been reduced and inflation was likely to be led by sustained wage hikes, instead of a spike in import costs, following news that wage hikes for fiscal 2024 ending in March 2025 were set to well surpass the pace of increase seen in the previous year.
Governor Kazuo Ueda told a post-meeting news conference on March 19 that the pace of further rate hikes as part of the bank's policy normalization process is likely to be gradual. But he also told reporters last week that if the depreciation of the yen pushes up import costs and thus inflation, having a huge impact that cannot be ignored, it could cause a change in monetary policy. The BoJ will also release its quarterly Outlook Report to provide the board's latest outlook for economic growth and inflation as well as risk analysis including its first economic estimate for fiscal 2026, by when the board wishes to see inflation anchored around the 2 percent target.
The French INSEE sentiment indicator for the manufacturing sector is seen unchanged at 102 in April, a couple of points above its long-run average.
In the US, first-quarter GDP is expected to slow to 2.3 percent annualized growth versus fourth-quarter growth of 3.4 percent. Personal consumption expenditures, after the fourth quarter's 3.3 percent rate, are expected to rise at a 2.8 percent pace.
The US goods deficit (Census basis) is expected to deepen by $0.7 billion to $91.0 billion in March after narrowing by $0.3 billion in February to $90.3 billion.
Initial claims for the April 20 week are expected to come in at 215,000 versus 212,000 in the prior two weeks and 212,000 in five of the last six weeks. The four-week average has held at 214,500 for the past three weeks.
Wholesale inventories are expected to increase 0.3 percent in the advance report for March that would follow a sharp 0.5 percent build in February.
Pending home sales in March are expected to rise 1.0 percent on the month, after rising 1.6 percent in February and falling 4.7 percent in January.
Consumer inflation in Tokyo, the leading indicator of the national average, is forecast to decelerate further or to be little changed in April on easing food price markups after slowing in March from a jump in February, when the waning base-year effect of utility subsidies led to a much smaller fall in energy prices. Services costs are leading overall inflation as firms are raising wages at a faster pace to secure qualified workers amid widespread labor shortages.
The core CPI (excluding fresh food), closely watched by the Bank of Japan, is expected to post a 2.2 percent gain on year after increase of 2.4 percent in March, 2.5 percent in February and 1.8 percent in January. The year-over-year rise in the total CPI is forecast at 2.6 percent, unchanged from March. The core-core CPI (excluding fresh food and energy) annual rate is expected to ease further to a 16-month low of 2.7 percent from 2.9 percent.
The Bank of Japan is expected to hold the overnight interest rate target steady in a range of zero to 0.1 percent after conducting its first rate hike in 17 years and ending the seven-year-old yield curve control framework last month. The next rate hike is likely to be in July, September or October, when more evidence of a higher pace of wage hikes emerges. At their March meeting, many board members judged that the risk of Japan's economy slipping back into deflation had been reduced and inflation was likely to be led by sustained wage hikes, instead of a spike in import costs, following news that wage hikes for fiscal 2024 ending in March 2025 were set to well surpass the pace of increase seen in the previous year.
Governor Kazuo Ueda told a post-meeting news conference on March 19 that the pace of further rate hikes as part of the bank's policy normalization process is likely to be gradual. But he also told reporters last week that if the depreciation of the yen pushes up import costs and thus inflation, having a huge impact that cannot be ignored, it could cause a change in monetary policy. The BoJ will also release its quarterly Outlook Report to provide the board's latest outlook for economic growth and inflation as well as risk analysis including its first economic estimate for fiscal 2026, by when the board wishes to see inflation anchored around the 2 percent target.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
