Written Commentary
The Ghost in the Machine Q4 2023
November 28, 2023
Macroeconomics: The Week Ahead: 9 May to 13 May
- May 9, 2022
- Marc Ostwald
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Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist
The Week Ahead – Preview:
For the time being markets mostly focused on central bank policies, inflation and growth risks and China’s measures to contain the current COVID-19 outbreak, which all have the ascendancy over the war in Ukraine, but the latter risk remains ever present. The new week in thematic terms will be much the same as last week, with US and China inflation data (also due in Brazil, India, Indonesia and Mexico), UK Q1 and March GDP, and China Trade and Credit Aggregates topping the run of data. Central bank speakers will again be plentiful, as will US (and other) corporate earnings It will also be a very busy week for govt bond supply, with the US selling $103 Bn of 3, 10 & 30-yr, while the UK, Germany, Japan, Australia and Canada hold two auctions each, and sales also due in Austria, Ireland, Netherlands and Portugal.
In the Commodity space, the EIR, IEA and OPEC all publish their monthly Oil Market Reports, while the US USDA publishes its World Agricultural Supply/Demand (WASDE) report, with equivalent reports due from China’s Farm Ministry (CASDE) and Brazil’s CONAB. There are a raft of sector corporate earnings, and it will also be a busy week for commodity sector conferences, featuring amongst others: South Africa Indaba Mining, New York ISO Sugar Conference, Canada Gas & LNG Exhibition and Conference and UAE Globoil International Vegetable Oils and Oilseeds.
In terms of the week’s inflation data, US CPI is seen up 0.2% m/m, as energy prices reversed temporarily, while core CPI is expected to edge up 0.1 ppt to 0.4% m/m, which thanks to base effects would see y/y rates ease to 8.1% and 6.0%, in other words remaining close to multi-decade highs, even if lower than March. Base effects and energy price falls are expected to benefit China’s PPI, seen dropping to 7.8% from 8.3%, while food prices are seen pushing CPI up to 1.9% y/y from 1.5%, on a combination of adverse base effects and lockdown related supply pressures. UK Q1 GDP is forecast to rise 1.0% q/q, but with March GDP seen flat after a tepid 0.1% in February, the loss of momentum going into Q2 will be all to palpable. China’s April Trade data are forecast to show a most 2.7% y/y gain (March 14.7%) , with Imports seen falling 3.1% (March -0.1%), but with so much disruption from lockdown measures, the possibility of a large outlier on either or more likely both is large.
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