Last week, New Zealand, Canada and the Eurozone kept interest rates on hold at 5.5%, 5% and 4.5% respectively, US Headline inflation jumped to 3.5% and gold hit record highs before dropping 100 points and closing at 2344 $ per oz. Iran attacked Israel over the weekend with Bitcoin dropping 10%, before staging a small recovery.
JP Morgan boss Jamie Dimon recently wrote in his letter to shareholders, “All of the following factors appear to be inflationary: ongoing fiscal spending, remilitarization of the world, restructuring of global trade, capital needs of the new green economy, and possibly higher energy costs.”
To this week and we should glean a better understanding of Worldwide Inflation as Canada, New Zealand, the UK, the Eurozone and Japan, all release inflation figures. The UK and Australia release employment numbers and we look forward to US Retail Sales and the German ZEW Sentiment Index.
Monday’s main data release is US Retail Sales which is expect to drop to +0.4% (M.o.M) for March.
Tuesday morning starts with UK employment figures; the unemployment rate expected to rise to 4% for February. German economic sentiment is likely to be more positive with predictions of a rise in the ZEW Sentiment Index to 35.1 for April. Canadian inflation is forecast higher at 0.7% (M.o.M) for March with Core likely to be higher than its previous reading of 2.1% Y.o.Y. In the late evening, we receive New Zealand inflation numbers (released every quarter), with the Q.o.Q figure expected to increase to 0.6%. The year-on-year figure was +4.7% last time out and the RBNZ and others will be worried that this doesn’t notch up to 5%.
Wednesday and UK inflation numbers are out early. The most sanguine view is for UK CPI to fall to 3.1% Y.o.Y for March. The Eurozone follows later in the morning with expectations for Core CPI to drop to below 3% for March.
Thursday’s main release is Australian employment numbers with the unemployment rate due to shift up to 3.9%. Japanese inflation figures are released very early on Friday morning with CPI forecast to fall to 2.7% Y.o.Y for March.
Good Luck and Good trading!
Ben Robson is Head of Institutional E-FX at Swiss Finance Corporation. He is also the Amazon Best Selling Author of Currency Kings – How Billion traders Made their Fortune Trading Forex. McGraw Hill 2017
