In the final week of the month, the initial reaction to the French Presidential election on European assets will be key. However, with markets already prepared and quickly pricing in the result, attention will quickly turn elsewhere, with a return of the tier-one data for major economies. There is a big focus on inflation and the first look at Q1 GDP for both the US and Eurozone. We are also looking at inflation elsewhere too, in Australia and Latin America. 

Watch for: 

  • North America – US Consumer Confidence, Advance GDP and Core PCE
  • Europe & Asia – The Bank of Japan, Australian and Eurozone inflation, and Eurozone growth  
  • LatAm – Brazil mid-month inflation and Colombian inflation 

North American data: 

  • US Durable Goods (Tuesday 26th April, 1330BST) Core durables (ex-transport) are expected to bounce back in March with +0.5% (after -0.6% in February)
  • US S&P Case-Shiller Home Prices Index (Tuesday 26th April, 1400BST) Year on year house price growth is expected to increase to 19.3% in February (from 19.1% in January)
  • US New Home Sales (Tuesday 26th April, 1500BST) Sales are expected to improve slightly to 776,000 in March (up from 772,000 in February).
  • US Consumer Confidence (Tuesday 26th April, 1500BST) Confidence is expected to continue to decline, to 106.0 in April (from 107.2 in March)
  •  US Pending Home Sales (Wednesday 27th April, 1500BST). The year on year decline is expected to moderate slightly to -5.0% in March (from -5.4% in February) 
  • US Advance GDP (Thursday 28th April, 1330BST) The consensus is that Q1 2022 growth is expected to have fallen significantly to +1.0% (after +6.9% growth in Q4 2021)
  • US Core PCE (Friday 29th April, 1330BST) Consensus is expecting core inflation to increase to 5.5% in March (from 5.4% in February) 
  • Canadian GDP (Friday 29th April, 1330BST) Month on month growth is expected to be +0.8% in February (after +0.2% in January)
  • Michigan Sentiment - final (Friday 29th April, 1500BST) The consensus is looking for a sentiment to be unrevised from the April flash at 65.7 (confirming the improvement from the final 59.4 in March)

Given the sharp increases in inflation and the legacy of the war in Ukraine, the first look at Q1 growth with US Advance GDP will garner a lot of attention this week. The consensus is looking for +1% (annualized), with the analyst range broadly between 0% and +2.0%. The well-respected Atlanta Fed’s GDPNow model suggests +1.3% growth. Any downside surprises to the consensus would be risk negative and may weigh on Treasury yields (especially at the longer end of the yield curve). This may lead to some USD profit-taking.

GDP estimate

Core PCE inflation is expected to continue the track higher, with a move up to 5.5% which would still be a whole one percent below the core CPI. More interesting would be any signs that peak inflation may be close. This was hinted at after the US Core CPI missed estimates a couple of weeks ago.

The Conference Board’s Consumer Confidence is expected to track back lower. However, with the prelim Michigan Sentiment ticking higher to 65.7 in April there is a slight divergence which may reduce the market impact of the confidence data. However, any positive surprise would be seen as USD supportive.

Consumer confidence

Market Reaction: 

  • There is a lot for USD traders to watch for this week. The capacity for surprises in the Advance GDP will increase any USD reaction.
  • Core PCE can often be a bit of an afterthought for traders with the CPI data taking the attention a couple of weeks ago.

Europe & Asia: 

  • Australian CPI (Wednesday 27th April, 0230BST) Headline inflation for Q1 is expected to increase to 3.7% (up from 3.5%), with the RBA’s Trimmed Mean CPI increasing to 3.4% (from 2.6% in Q4)
  • Bank of Japan monetary policy (Thursday 28th April, 0400BST) The consensus is expecting no change to monetary policy
  • China Caixin Manufacturing PMI (Friday 29th April, 0245BST) The consensus is looking for a worsening contraction in April down to 47.9 (from 48.1 in March)
  • Eurozone HICP (Friday 29th April, 1000BST) Inflation is expected to continue to rise slightly in April, with the headline up to 7.5% (from 7.4%) and core inflation up to 3.0% (from 2.9%)
  • Eurozone GDP - flash (Friday 29th April, 1000BST) The first look at Q1 growth is expected to show QoQ growth of +0.3% (after growth of +0.3% in Q4 2021)

Inflation and growth data are key this week. Australian inflation is expected to move decisively higher in Q1 to 3.4% (on a Trimmed Mean basis) which is decisively above the Reserve Bank of Australia’s inflation target average range of 2% to 3%. This will add to the growing pressure on the RBA to start tightening rates. The hawks on the Governing Council of the European Central Bank continue to gain voice too. Two members are now calling for a  July rate hike. With Eurozone inflation expected to continue to tick higher in April, this clamor will only grow. However, if flash Eurozone GDP disappoints, the hawkish implications may be slightly muted.


Elsewhere, whilst we see inflation is starting to rise in Japan (core CPI at +0.8%) the  Bank of Japan is staunchly sticking to its dovish line. It recently promised to buy an unlimited number of government bonds (JGBs) to keep the limit of the 10-year yield below 0.25%. Despite the rising inflation, the BoJ believes it is a “cost-push” move (according to BoJ Governor Kuroda) which will moderate in due course. It is therefore appropriate to “continue easy monetary policy” to achieve the 2% inflation target.

Market Reaction: 

  • AUD will move on the Australian CPI data surprises. Also, AUD traders should watch the Caixin PMI data which will play into broader risk appetite early on Friday.
  • EUR would be supported by any upside inflation surprise.

Latin America: 

  • Mexican Retail Sales (Tuesday 26th April, 1200BST) Analysts are looking for sales to increase by +0.5% in February although the Year on Year sales growth is expected to fall to 5.3% (from 6.7%) 
  • Brazil mid-month inflation (Wednesday 27th April, 1300BST) Inflation at the mid-month stage for April is expected to be increasing again to 10.86% (from 10.79%)
  • Mexican Unemployment (Thursday 28th April, 1200BST) The jobless rate is expected to remain at 3.7% in March.
  • Chilean Unemployment (Thursday 28th April, 1400BST) The rate is expected to increase slightly to 7.6% in March (up from 7.5% in February)
  • Brazilian Unemployment (Friday 29th April, 1300BST) The rate is expected to increase to 11.6% in March (from 11.2% in February)
  • Colombian Unemployment (Friday 29th April, 1600BST) The rate is expected to reduce slightly to 12.1% in March  (from 12.9%)
  • Colombian central bank interest rates (Friday 29th April, 2100BST) A sizeable rate hike to 7.0% is expected (from 5.0%) 

Brazilian mid-month inflation is expected to continue to move higher in April. This would further firm expectations that further rate hikes may be on the way by the central bank. 

Unemployment has been trending lower across the major Lat Am economies over the past year to 18 months. However, there have been some signs of the jobless rates beginning to pull higher again in the early months of 2022. Given the high level of interest rates from central banks, these increases will be watched closely by central banks. 

Unemployment rates

The Colombian central bank hiked interest rates by +100 basis points to 5.0% at the end of March. However, this was less than the 150bps (+1.50%) hike that had been forecast by analysts. An even bigger increase could be seen this month as inflation soared above 8.5% in March.

LatAm currencies

Market Reaction

  • Higher than expected unemployment data may see currencies coming under further pressure as downside moves on COP, MXN and CLP have been seen in the past week.
  • It has been interesting to see the COP slipping in the past month since the central bank undershot hiking expectations. Will this again be the case up against big expectations this month?

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.