Top 5 Economic Calendar Events March 26 – April 1
New York (Mar 26) US political developments will continue to have an important impact during the week following the decision to withdraw the Healthcare Bill after the Republican leadership could not get it through the House. In particular, tax proposals will now be an important focus if healthcare reform is effectively abandoned for now.
Markets will continue to monitor speeches from Federal Reserve officials, although there are no scheduled speeches from key officials.
China’s PMI data could have a significant impact if substantially different from expectations.
Overall market positioning across all asset classes will be a crucial factor for the week ahead of the month and quarter end, especially with the closing of the Japanese fiscal year, which has the scope to trigger significant market moves.
European political events will continue to be monitored closely with the French Presidential election first round due in less than one month.
1. US trade balance
The US goods trade data will be released on Tuesday March 28th at 08.30 ET.
The goods trade deficit for last month was much higher than expected at $69.2bn for January from $64.4bn the previous month, although this was subsequently revised down slightly to $68.8bn.
Developments in the trade account will continue to be watched very closely in the short term. Any further widening of the trade deficit would undermine GDP growth and also cause some concerns within the Fed over the dollar’s level in global markets.
More importantly, a widening trade deficit would increase the potential for trade tensions between the US Administration and international trade partners.
The risk of trade protectionism will be a key political and economic focus during the next few months and the US Treasury will have to decide in April whether to label any countries as trade manipulators when it is due to publish the latest currency report.
The bilateral figures with key partners will, therefore, also be watched closely as well as the headline figure. A sharp narrowing of the deficit would ease immediate trade concerns and ease political pressures to some extent.
2. UK triggering of Article 50
The UK government is due to invoke Article 50 on Wednesday March 29th. The triggering of Article 50 will certainly come as no surprise given that the government has pre-announced that it will take place on March 29th.
Once Article 50 has been triggered, the EU Council will draft its negotiating stance for discussion among the other 27 EU members.
Markets will be monitoring initial rhetoric from UK and EU officials as the triggering of formal negotiations will be important in letting all sides promote their own vested interests.
In general terms, an antagonistic stance from officials would tend to undermine Sterling and suggestions that negotiations will make very slow progress could also be damaging. Overall market positioning will also be an important factor, especially given the substantial number of short Sterling positions.
The UK will release current account data and final GDP data for Q4 2016 on Friday March 31st.
3. Eurozone consumer prices
The flash Eurozone consumer inflation data will be released on Friday March 31st at 05.00 ET.
The latest Eurozone inflation data will continue to be watched closely given the potential impact on ECB policy. Headline inflation has risen sharply over the past few months due to the increase in oil prices and very important impact of base effects.
Momentum towards a further increase in headline inflation will now tend to slow, especially as there has been a retreat in oil prices over the past few weeks. The impact of base effects will also gradually fade over the next two months.
There will be a growing focus on the underlying inflation, especially as the ECB has concentrated on the fact that underlying inflation has remained low.
The Eurozone flash PMI data recorded a further increase in inflation pressures, which suggests an underlying increase in inflation. The ECB will be watching the inflation data closely with increased pressure to scale back policy accommodation if underlying inflation is stronger than expected.
Germany is scheduled to release its provisional CPI data on Thursday March 30th.
4. US PCE Price Index
The US PCE price index will be released on Friday March 31st at 08.30 ET.
US inflation developments will continue to be a very important focus given the focus on inflation developments within the Federal Reserve Open Market Committee (FOMC).
Minneapolis Fed President Kashkari dissented at the March meeting, primarily because of the lack of progress on inflation.
The more dovish members of the FOMC have continued to back an accommodative monetary policy on the grounds that inflation is still below target.
A subdued reading for the PCE price index, especially for the core reading, would strengthen their argument while a stronger reading would strengthen the position of more hawkish members on the committee. Any move above 2.0% for the headline rate from 1.9% would be significant, although the core rate will be the main focus, which was held at 1.7% last month.
5. US consumer confidence
The latest US consumer confidence data is due on Tuesday March 28th at 10.00 ET.
Overall indicators of consumer confidence have remained strong since November’s Presidential vote, although the most recent retail sales data has been relatively lacklustre.
The PMI data suggests that the manufacturing sector is performing better than the services sector and there has been some evidence that employment growth in services has faded.
The latest consumer confidence data will be watched closely to assess whether there is any evidence of confidence in the outlook faltering, which could have important implications for the wider economic outlook. The Chicago PMI data is due for release on Friday March 31st.
Source: EconomicCalendar
