What mattered last week and a preview of the week ahead 22nd April

What mattered last week:

  • A mixed week for U.S. stocks as the NASDAQ made new all-time highs.
  • However, the broader market closed flat as weakness in health care stocks weighed, following Bernie Sanders comments around his proposed “Medicare for All” program which would hurt private health insurers premiums.
  • The revival in Chinese shares continued thanks to the better run of Chinese data with the Shanghai composite finishing the week +1.85%.
  • In Australia, the Federal election campaign continued. The polls point towards a Labor party victory, although the Coalition did receive a small boost following the announcement of tax cuts in its Budget release.
  • Staying in Australia, jobs data for March showed the economy created +25.7K new jobs and the unemployment rate remained low at 5.0%. Continued strength in the jobs market justifying some of the RBA’s optimism in the local economy.
  • The AUDUSD was unable to sustain its rally post the strong jobs data and closed the week back near .7150.
  • The ASX 200, remains in a pre-election holding pattern closing at 6259.8, up just 8.5pts for the week.

For the week ahead, the key events are:

Australia: CPI (Wednesday), Q1 export and import prices (Friday).

  • CPI (Wednesday): Headline CPI is expected to rise by just 0.2% in Q1 resulting in year on year inflation falling to 1.5% from 1.8%. The RBA’s preferred measure of core inflation, Trimmed Mean is expected to rise by 0.4%, which would see the year on year rate fall to 1.6%. This would mark the 13th consecutive quarter that year on year core inflation has been below the floor of the RBA’s 2-3% target range and a catalyst for the RBA to shift from a neutral to dovish bias.

New Zealand: ANZ consumer confidence and balance of trade (Friday).

China: Nothing of note.

Japan: Bank of Japan (BoJ) interest rate decision (Thursday), industrial production and retail sales (Friday).

  • BoJ (Thursday): No major change is expected from the BoJ, although some shift in forward guidance is expected.

U.S.: Existing home sales (Tuesday), new home sales (Wednesday), durable goods (Thursday), Q1 GDP (Friday).

  • GDP (Friday): The market is looking for GDP growth of around 1.8% in the first quarter, reflecting the usual Q1 negative impacts from the winter weather.

US Q1 2019 earnings season continues with reports from companies including Facebook, Microsoft and Amazon.

Canada: Bank of Canada (BoC) Interest rate decision (Thursday).

  • BoC Interest rate decision (Thursday): The BoC is expected to keep the overnight target stable at 1.75%. The accompanying statement is expected to see the BoC shift from a tightening bias to neutral bias.

Euro Area: German IFO business climate survey (Wednesday).

UK: Nothing of note.


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