Written Commentary
- US GDP and tsunami of Q1 earnings dominate schedule as markets look to BoJ policy meeting tonight; digesting Swedish Q1 GDP, awaiting EC Confidence surveys, US weekly jobless claims, Pending Home Sales and KC Fed Manufacturing; ECB’s Panetta sole monetary policy central bank speaker: US and Italy debt sales; US Debt Ceiling and First Republic jitters remain
- US Q1 GDP: solid gain expected, but likely flattered by ‘strength’ of Personal Consumption; trade and govt spending positive; business investment, inventories and housing set to drag
- US Weekly Jobless Claims: further marginal rise seen, a case of less tight rather than loosening for the time being
- Japan: Tokyo CPI seen peaking headline, but core edging up again; BoJ to hold policy, but focus on comments on comprehensive policy review
EVENTS PREVIEW
US Q1 advance GDP and a deluge of corporate earnings top the day’s agenda, with a light events calendar featuring Turkey’s TCMB rate decision and just monetary policymaker scheduled to speak (ECB’s Panetta), while concerns over the US Debt Ceiling and First Republic Bank continue to play on investor sentiment. There are Swedish Q1 GDP and Asian earnings from the likes of China’s POSCO, CNOOC and Sinopec to digest, while the EC Confidence surveys, US weekly jobless claims, Pending Home Sales and KC Fed Manufacturing lies ahead statistically. A vast array of sectors feature in terms of European and North American earnings, featuring amongst others: AstraZeneca, BASF, BBVA, Nordea, RWE, Sanofi, TotalEnergies and Unilever in Europe, while across the pond the focus will be on the like of Caterpillar, CBRE, Domino’s Pizza, Eli Lilly, Intel, Keurig Dr Pepper, Mondelez, Mastercard, Newmont, SiriusXM, Southern Company, with miners like Agnico Eagle Mines and Eldorado Gold in Canada and Brazil’s Cia de Minas Buenaventura also reporting. Italy holds its regular end of month 5 & 10-yr BTP sale, and the US offers 7-yr. Tonight the attention turns to the run of Japan inflation and activity data, and above all the much anticipated BoJ policy meeting.
** U.S.A. – Q1 GDP, weekly Jobless Claims **
US Q1 GDP is seen up a solid 1.9% SAAR (or 0.5% q/q), with Private Consumption (exp. 4.0% SAAR) the primary driver. However, the latter was primarily a function of unseasonably warm weather and associated seasonal adjustment problems, with Net Exports (particularly given the sharp fall in the Goods Trade Balance reported yesterday) and Govt spending also likely to give a boost, while business investment (with forecasts tweaked lower after the drop in core Durable Goods shipments yesterday), inventories and housing are likely to drag (though housing will be a much smaller drag than in 2022). On balance the strength of personal consumption, even if it is relatively artificial, will likely be seen by the Fed as a reason to hike again next week, with the expected 248K rise in Initial Claims likely viewed as a modest loosening of a still very tight labour market.
** Japan – BoJ policy meeting, Tokyo CPI and activity data **
Coming literally hours ahead of the BoJ rate decision, Tokyo CPI is seen unchanged at 3.3% y/y headline and 3.2% y/y ex-Fresh Food, but core is forecast to edge up to a fresh high of 3.5%, making uncomfortable reading for Ueda & Co, even if they will probably emphasize that inflation is on course to drop in coming months. Industrial Production and Retail Sales are both forecast to post moderate m/m gains after strong readings in February. New BoJ governor Ueda has been at pains to signal that there will be no change in policy at this week’s meeting but has equally dropped plenty of hints about a comprehensive review of its ultra-accommodative policy stance during the Kuroda era. Markets remain understandably very wary about any signals on a potential future shift away from its ultra-accommodative policy stance, and even more so after the March ‘core core’ National CPI was higher than expected at 3.8%, and at its highest yr/yr level since 1981.
To view the full report and to sign up for daily market commentary please email admisi@admisi.com
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
