There wasn’t any news out over the weekend so it should be another quiet start to the week. Remember that Japan is away for the Golden Week, and many countries will also be away on May 1st. That said, it will be a busy week with the FOMC & BOE meetings, NonFarm Payrolls and other EU data due. We closed Friday with relatively strong equity markets and a mixed reaction from the USD Q1 GDP.
Themes for the Week:
- FOMC: the market is not expecting any change in policy or statement. Patience and the dovish/accommodative tone are the consensus, but given recent data alongside strong equities and steady to easing financial conditions, we might get a somewhat more upbeat tone.
- The Bank of England also meets this week, but it is expected to be a non-event.
- EU earnings: quarterly earnings were supposed to be the worst in Europe in almost three years, but with a third of results in, things are looking a little rosier. Financials have delivered the biggest surprises, according to analysis by Barclays.
- US/China trade talks resume.
- USD: strength is seen in the USD after decent data recently, and EM currencies like ARS, TRY, BRL are once again suffering. The stronger the USD gets, the more pressure will be exherted on EM debt and trade.
Data in the Week Ahead:
- Spanish Election Effects
- BOE's Carney speaks + BOE Decision
- CNH Manuf. PMI & Caixin PMI
- GER CPI
- EUR Flash GDP & CPI
- CAD GDP
- BOC's Poloz Speech
- NZD Unemployment Change
- FOMC Decision
On the Radar:
Evidently I remain biased long on the Dax and the SPX. I also favour further USD and JPY strength vs. EUR, GBP and CAD primarily.
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