24 April 2022 – The Week Ahead

Outlook:

In the week ahead, we provide you with all the necessary to build your strategy during the upcoming week with extra knowledge and up-to-date updates.

Investors will be watching corporates earnings, hoping that solid earnings will help the equity markets. Meanwhile, both the U.S. and the Eurozone are to release preliminary data on first-quarter growth along with what will be closely watched inflation readings.

In the U.S.

Data on U.S. economic growth and inflation will be under the spotlight this week due to concerns over whether the Fed can oversee a delicate plan for the economy as it acts aggressively to curb soaring inflation.

First-quarter growth preliminary data with GDP expected to slow sharply to 1.1% from its value in the last quarter in 2021 at 6.9%. Furthermore, the GDP data will be followed a day later by the personal consumption expenditures index, believed to be the Fed preferred meter of inflation.

Fed Chair Jerome Powell said last week “a half-point interest rate increase will be on the table” in the net meeting on May 3-4. Fed Chairman added that investors expecting a series of half-point hikes were “reacting appropriately, generally” to the Fed’s emerging fight against inflation.

The economic calendar also features durable goods orders, CB consumer confidence, new home sales, pending home sales, initial jobless claims, the Chicago PMI, and consumer sentiment.

U.S. Major in The Week Ahead:

Date	Event	Forecast	Previous
26-Apr	Core Durable Goods Orders m/m	0.50%	-0.60%
26-Apr	Durable Goods Orders m/m	1.00%	-2.10%
26-Apr	CB Consumer Confidence	108.5	107.2
28-Apr	Advance GDP q/q	1.00%	6.90%
28-Apr	Advance GDP Price Index q/q	7.30%	7.10%
28-Apr	Unemployment Claims	178K	184K
29-Apr	Core PCE Price Index m/m	0.30%	0.40%
29-Apr	Revised UoM Consumer Sentiment	65.8	65.7

Eurozone

The Eurozone is to publish data on first-quarter GDP amid preliminary data on consumer price inflation for April, which is expected to come in at 7.4%, almost four times higher than the European Central Bank’s 2% target. Last week ECB President Christine Lagarde said the ECB is likely to end its bond purchase scheme early in the third quarter and raise rates before the end of the year to combat rising inflation.

But the war in Ukraine is clouding the picture for the ECB resulting in high energy prices and disruptions to supply chains caused by the pandemic and aggravated by the war acting as a drag on growth.

European earnings get underway in earnest in the coming week and while companies are expected to have coped with higher inflation in the first quarter, investors will be keenly focused on their outlooks for the rest of the year.

In the French elections, market participants misjudged some presidential candidates, but a victory by Marine Le Pen would be a big surprise. Following last week’s TV debate, incumbent President Emmanuel Macron is at a 12-point lead in the polls. Many analysts have speculated that a Le Pen victory could trigger a constitutional crisis.

European Major in The Week Ahead:

Date	Event	Forecast	Previous
24-Apr	French Presidential Election
24-Apr	IMF Meetings
25-Apr	German IFO Business Climate	88.3	90.8
25-Apr	Belgian NBB Business Climate	0.2	0.4
27-Apr	German GfK Consumer Climate	-14.3	-15.5
28-Apr	German Prelim CPI m/m	0.60%	2.50%
28-Apr	Spanish Flash CPI y/y	9.10%	9.80%
28-Apr	Spanish Unemployment Rate	12.90%	13.30%
28-Apr	ECB Economic Bulletin
29-Apr	French Consumer Spending m/m	-0.10%	0.80%
29-Apr	French Flash GDP q/q	0.30%	0.70%
29-Apr	German Import Prices m/m	3.20%	1.30%
29-Apr	French Prelim CPI m/m	0.30%	1.40%
29-Apr	Spanish Flash GDP q/q	0.60%	2.20%
29-Apr	M3 Money Supply y/y	6.20%	6.30%
29-Apr	Italian Prelim GDP q/q	-0.30%	0.60%
29-Apr	German Prelim GDP q/q	0.20%	-0.30%
29-Apr	Private Loans y/y	4.50%	4.40%
29-Apr	CPI Flash Estimate y/y	7.50%	7.40%
29-Apr	Core CPI Flash Estimate y/y	3.10%	2.90%
29-Apr	Italian Prelim CPI m/m	0.60%	1.00%
29-Apr	Prelim Flash GDP q/q	0.30%	0.30%

United Kingdom

Friday’s disappointing UK Retail Sales and S&P Global Services PMI accentuated the BOE’s dilemma, knocking the pound below 1.2900, its lowest level since November 2020. UK Retail Sales dropped -1.4% over the month in March vs. -0.3% expected and -0.5% previous. Meanwhile, the Preliminary UK Services Business Activity Index for April slipped to 58.3 versus March’s 62.6 and 60.0 expected.

There is nothing significant, in terms of top-tier economic releases from the U.K. this week. But the effect of the U.S. releases should be closely followed.

U.K.’s Major in The Week Ahead:

Date	Event	Forecast	Previous
25-Apr	Rightmove HPI m/m		1.70%
25-Apr	CBI Industrial Order Expectations	24	26
26-Apr	Public Sector Net Borrowing	14.2B	12.3B
27-Apr	CBI Realized Sales	12	9
29-Apr	Nationwide HPI m/m	0.80%	1.10%

Elsewhere:

Date	Currency	Event	Forecast	Previous
25-Apr	CAD	BOC Gov Macklem Speaks
27-Apr	AUD	CPI q/q	1.70%	1.30%
28-Apr	JPY	BOJ Outlook Report
28-Apr	JPY	Monetary Policy Statement
28-Apr	JPY	BOJ Press Conference
29-Apr	CHF	SNB Chairman Jordan Speaks
29-Apr	CAD	GDP m/m		0.20%

Crude oil

This past week, governments and market participants were trying to figure out the real effect of China’s zero-Covid policy and its extended lockdown of Shanghai. Global oil benchmark Brent and West Texas Intermediate, settled on Friday, logging a third weekly loss in four weeks, reacting to the Covid clampdown on Shanghai, as well as the prospect of weaker global growth and higher interest rates.

According to official government data released this week, China’s economy grew 4.8% year on year in January-March. But the IMF downgraded its growth forecasts for China in 2022.

As a result of the Shanghai lockdown, diesel and aviation fuel in April is expected to drop by 20% from a year earlier. That would be equivalent to a drop in crude oil consumption of 1.2 million barrels a day and will be the largest hit to demand since the lockdown more than two years ago.