07 Apr 2017

The week ahead: Monday 10 April 2017

Philip Shaw

Chief Economist

The week ahead will be a shortened one in the US, UK and wider EU; markets are closed on Friday 14th April for the start of the Easter break, though we note that this is not a Federal Holiday in the States so data will still be released.

In the run up to Easter, we suspect we will see a relatively quiet period for political news, with few top tier political events. Note that the week will commence on the heels of President Trump’s meeting with Chinese President Xi Jinping (6-7 April), which has come at a crucial time, given recent developments between the US and North Korea.

In the US, the Senate and the House are not in session over the next fortnight and we suspect that behind the scenes talks on advancing President Trump’s tax reform, healthcare and infrastructure plans will continue to move forward, only slowly. Risk sentiment has been soured further over the past week after the US House of Representatives Speaker Paul Ryan said that the White House, Congress and the Senate were not on the same page with tax reform.

With fewer political happenings, data will likely move to the fore next week with several top-tier releases due from the US. On Friday 14th advance retail sales and CPI inflation numbers for March are due. The day before, we will see producer input price data published and preliminary Michigan consumer sentiment numbers for April; one question on the latter is the extent to which sentiment has suffered after the US President’s failed attempt to repeal and replace Obamacare.

In the UK, data is likely to take centre stage too. CPI inflation figures for March are due out Tuesday morning; we expect to see inflation edging up from 2.3% to 2.4% although the ‘core’ rate should drop back to 1.9% from 2.0%, albeit temporarily; this is a month in which there are a number drivers in both directions, discussed in the indicator boxes below. Labour market data, the RICS housing market survey and the BRC Retail Sales Monitor are also due, providing another spot check on the health of the UK economy as it edges further towards Brexit. With the Easter holidays approaching and with UK Parliament in recess, there is likely to be little by the way of major developments in Brexit talks over the coming week.

In the Euro area, the week will open in the wake of the Eurogroup discussions on Greece, amongst other things. We would be very surprised to see Greece’s latest bailout review signed off this weekend however. On the data front next week, key releases to watch out for will be EU19 industrial production for February, Germany’s ZEW survey for April and final German inflation figures for March.

Finally, on the global stage, note that we have Chinese trade figures for March due, providing the first ‘clean’ (post Chinese New Year affected) print. The March lending figures are also due out, including total social financing and new yuan loans. VC

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