Week Ahead Economic Preview: Week of 10 April 2023

The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

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The coming week sees important updates to inflation rates in the US, mainland China and Eurozone, as well as the release of minutes from the latest rate-hiking FOMC and ECB meetings. Policymakers at the Bank of Canada meanwhile gather to set rates. Also look out for UK GDP and Eurozone industrial production data, as well as updated US retail sales and mainland China's trade numbers.

March saw both the FOMC and ECB hike interest rates by 25 and 50 basis points respectively despite the flaring of banking sector stress. Minutes from these meetings will be eagerly digested in the coming week to assess the extent to which policy may soon be put on hold, given the recent tightening of financial conditions.

Fresh inflation data will add to the debate, with final consumer price data set to show a notable cooling in Europe amid lower energy prices and set to moderate from a monthly rise of 0.4% to 0.2% in the US. However, eyes will be focused on the core inflation reading in the US, which consensus currently expects to hold at an elevated 0.5%.

The Bank of Canada had already paused its year-long rate hike process, and a drop in inflation to a 13-month low appears to have vindicated that decision. This week's meeting will therefore likely see the BoC remain on hold.

In the UK, an update to the monthly GDP statistics will be the focus of the week, with economists pencilling in a 0.1% drop in output to represent partial payback from a 0.3% gain in January and adding to the sense of an economy that is broadly stagnant. However, note that recent PMI data have surprised to the upside.

In APAC, mainland China's trade data are expected to show a rebound in both imports and exports after the easing of COVID-19 containment measures, while inflation is expected to have remained subdued. Singapore's GDP and data for the Australian labour market will also be keenly awaited.

Finally, S&P Global also releases its Investment Manager index, tracking expectations among US equity market asset managers. Last month's report showed ongoing risk aversion, and the latest banking sector turmoil makes for an interesting backdrop to the latest poll.

Recessions averted or delayed?

Gauging the next moves by the world's major central banks has become increasingly difficult, with recent PMI survey data showing global inflation gauges cooling but economic growth re-accelerating.

As our graphic illustrates, the global PMI input price gauge has followed a logical path of falling as monetary policy has been tightened aggressively. Economic growth, as measured by the PMI Output Index, had been falling sharply late last year, in line with what one would expect following rate hikes, but is now - unexpectedly -reviving. The March data were broadly consistent with approximately 3% annualised GDP growth (see special report).

The broad consensus appears to be one where this recent growth acceleration is short lived. Recent financial market turmoil, the further impact of recent interest rate hikes and the ongoing cost of living squeeze, appear likely to exact further tolls on global demand.

Expectations are mixed, however, as to whether growth will weaken to the extent that economies including the US and Eurozone fall into recessions. Clearly, upcoming data will help enlighten us. In the meantime, you can listen to our podcast where S&P Global Market Intelligence experts weigh up whether recessions have been averted or merely delayed.

Key diary events

Monday 10 April

Easter Holiday

Greece CPI (Mar)

Greece Industrial Production (Feb)

United States CB Employment Trends Index (Mar)

Tuesday 11 April

China CPI (Mar)

China PPI (Mar)

Norway CPI (Mar)

South Korea Central Bank Meeting (11 Apr)

Australia NAB Business Confidence (Mar)

South Africa Foreign Reserves (Mar)

Hong Kong Foreign Reserves (Mar)

Eurozone Sentix Investor Confidence (Apr)

Eurozone Retail sales (Feb)

South Africa Manufacturing Production (Feb)

Brazil CPI (Mar)

Wednesday 12 April

South Korea Unemployment Rate (Mar)

Japan PPI (Mar)

India CPI (Mar)

India Industrial Production (Feb)

United Kingdom Report on Jobs (Mar)

Brazil Retail Sales (Jan)

United States CPI (Mar)

United States Real Earnings (Mar)

Canada Central Bank Meeting (12 Apr)

United States FOMC Meeting Minutes

Thursday 13 April

Australia Unemployment Rate (Mar)

China Trade Balances (Mar)

United Kingdom Construction Output (Feb)

United Kingdom GDP MoM (Feb)

United Kingdom Manufacturing Production (Feb)

United Kingdom Trade Balances (Feb)

Germany CPI (Mar)

Italy Industrial Production (Feb)

Eurozone Industrial Production (Feb)

Ireland CPI (Mar)

Portugal CPI (Mar)

United States PPI (Mar)

Germany Current Account Balances (Feb)

Friday 14 April

Greece & India Holiday

Singapore GDP (Q1)

India WPI Inflation (Mar)

France CPI (Mar)

Spain CPI (Mar)

United Kingdom Labour Productivity (Q4)

Brazil Service Sector Growth

United States Retail Sales (Mar)

* Press releases of indices produced by S&P Global and relevant sponsors can be found here.

What to watch

Americas: US CPI and PPI data, Canada Central Bank meeting, Brazil CPI and Retail sales

The Fed will be keeping an eye on the US CPI and PPI figures set for release this coming week. After already seeing a moderation in price pressures, in part due to an easing of pressure on supply chains amid a weaker demand climate, the latest figures will provide clues as to whether the current downward trajectory has been sustained. FOMC Meeting Minutes will also be published on the day the CPI figures are released. The CB Employment Trends Index and data on Real Earnings will also be published in the US in the coming week.

The Bank of Canada meeting is scheduled for mid-week. Interest rate hikes have been aggressive since early-2022. However, with focus shifting to propelling growth, the current stance on monetary policy is anticipated to remain unchanged.

Turning to the South of America, Brazil CPI and Retail sales will be published in the coming week.

Europe: UK Industrial Production and GDP figures, CPI figures released across an array of European countries

In the UK, GDP and Industrial production data will be published. Additionally, the KPMG/REC Reports on Jobs will also offer an extensive picture of the current trends across the UK labour market.

Elsewhere, CPI figures for March are set to be released for Ireland, Germany, Greece, Portugal, France, Spain and other European countries, and will be looked at closely for signs of persistent inflation. Eurozone Industrial Production (Feb) and Retail Sales (Feb) will also be awaited eagerly.

Asia-Pacific: China CPI and PPI, India CPI, Singapore GDP, Bank of Korea Interest Rate decision, Australia employment data

Both of the largest Asian economies, China and India, are set to release their CPI figures next week. China Trade Balances will also be keenly anticipated. The Central Bank of South Korea will be convening to update monetary policy in the coming week. Other data to watch for will be the GDP figures (Q1) for Singapore and employment data for Australia.

Special reports:

Global economic growth accelerates further in March amid service sector revival - Chris Williamson

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Purchasing Managers' Index™ (PMI^®) data are compiled by S&P Global for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.