After being subjected to a vast array of tier-one data in the run-up to the Easter break, the economic calendar is looking a little more sedate this week. However, the forward-looking flash PMIs for major economies will give a key insight into economic growth trends moving into the second quarter of the year. There is also more inflation data for major economies to look out for.

Watch for: 

  • North America – US housing data, Canadian CPI and US Flash PMIs
  • Europe & Asia – PBoC interest rates, inflation for New Zealand, Japan and the Eurozone, flash PMIs for Japan, Australia, the Eurozone and the UK.  

North American data: 

Inflation is a growing problem for the Bank of Canada (although it is not alone). The recent monetary policy update included a “substantial upward revision” to the central bank’s outlook for inflation, with Canadian CPI expected to average 6% in H1 2022.  Inflation is expected to continue to rise in March to 5.9% (from 5.7%) and given the tendency for inflation to outstrip expectations around the world, there is an upside risk to this. 

Flash PMIs are a key forward-looking indicator for the activity of an economy. With rising inflation and fears over the Ukraine war hitting consumer sentiment, the PMIs are expected to show decelerating expansion in Q2. This is expected to be reflected in the US flash Composite PMI which is expected to drop to 57.0 in April. This suggests that there is still a decent read of how GDP is looking into Q2, even if it may be slightly lower than the current consensus estimate of around 1.8% annualised for Q1. 

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Market Reaction: 

  • Housing data is unlikely to move the needle on the USD too much, but the flash PMI is always watched. Any downside surprise would be risk negative and could weigh on USD (at least initially before a likely haven flows kicks in).
  • CAD to be supported if inflation is higher than expected.

Europe & Asia: 

  • People’s Bank of China interest rates (Wednesday 20th April, 0215BST) No change is expected to the 1 year Loan Prime Rate of 3.7%
  • Eurozone Industrial Production (Wednesday 20th April, 1000BST) Production is expected to increase by +0.8% MoM in February (after zero growth in January, which would improve YoY growth back into positive at +0.8% (from -1.3% )
  • New Zealand CPI (Wednesday 20th April, 2345BST) Q1 inflation is expected to jump to 2.0% (from 1.4% in Q4 2021), meaning the YoY inflation increases to 7.1% (from 5.9%).
  • Eurozone inflation - final (Thursday 21st April, 1000BST) Final inflation is expected to be unrevised from the March flash reading, at 7.5% for the headline CPI and 3.0% for core inflation. 
  • Australian flash PMI (Friday 22nd April, 0000BST) Both Manufacturing and Services PMIs are expected to reduce slightly, to pull the Composite PMI for April down to 54.3 (from 55.1 in March)
  • Japan CPI (Friday 22nd April, 0030BST) Core inflation is expected to increase to +0.8% in March (up from +0.6% in March)
  • Japan flash PMIs (Friday 22nd April, 0130BST) Analyst forecasts are looking for a slight deterioration in the Composite PMI to 48.6 in April (from 49.3)
  • UK Retail Sales (Friday 22nd April, 0700BST) Core sales (ex-fuel) are expected to be +0.4% in March (-0.7% in February) but this would reduce the YoY sales to +1.6% (from +4.6% in February)
  • Eurozone flash PMIs (Friday 22nd April, 0900BST) Analysts are looking for a slight deterioration in April in both Manufacturing (down to 56.2 from 56.5) and Services (down to 55.0 from 55.6). This would drag the Composite PMI down to 54.2 in April (from 54.9 in March)
  • UK flash PMIs (Friday 22nd April, 0930BST) A slight deterioration is expected in April for both Manufacturing (down to 54.8 from 55.2) and Services (down to 62.1 from 62.6). The Composite PMI is expected to drop to 59.6 in April (from 60.9)

Inflation data for New Zealand, Japan and the Eurozone is also expected to confirm continued price rises and growing issues for central banks. Headline New Zealand inflation jumping to over 7% (from 5.9% three months ago) would further stoke talk of the “path of least regret” that the Reserve Bank of New Zealand spoke about last week. Any upside surprise would fuel talk of further aggressive rate hikes. Eurozone inflation is only a final reading to the jump already seen in the flash data a couple of weeks ago. Furthermore, the ECB confirmed its snail’s pace normalisation last week. It might be worth watching Japanese bond yields for the market reaction and subsequent impact on USD/JPY if Japan's core CPI inflation continues to rise.  


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The broad trend of the PMIs last month was that analysts were on the pessimistic side. The decline in the PMIs did not seem to be as much as had been anticipated. However, as inflation continues to bite and supply chain issues hamper production and new orders, there is a downside risk to flash PMIs again. The Eurozone Composite PMI looks particularly susceptible to this.  

Market Reaction: 

  • EUR may need a substantial upward revision to inflation to drive a move higher, whilst there will still be downside risks to the PMIs which could weigh on the euro.
  • NZD would be supported by an upside surprise in New Zealand inflation.
  • Any negative surprises to UK retail sales or PMIs would drag GBP lower.

This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. INFINOX is not authorised to provide investment advice. No opinion given in the material constitutes a recommendation by INFINOX or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.