The Week Ahead: 15th – 19th April 2024

Overview for the Week Ahead

Highlights of the Week

Escalation in the Middle East conflict puts the US dollar and the Japanese Yen in focus.
From the US, retail sales and Fed Chair Powell will be the focal points following the recent inflation reports.
On Tuesday, the Chinese economy will be in the spotlight as investors await a fiscal stimulus package from Beijing.

It will be a busy week for investors in the third week of April amid geopolitical headwinds and the onset of the general election fever back home. Several stock market triggers including the January-March quarter results for fiscal 2023-24 (Q4FY24), general elections 2024, the Israel-Iran conflict, domestic and global economic macroeconomic data, crude oil prices, and global cues are likely to keep investors on their toes and will guide market direction this week.

Gold prices also experienced an uptick due to geopolitical uncertainties, increased central bank purchases, and heightened safe-haven demand. Consequently, emerging markets witnessed a late-week consolidation. Conversely, European markets demonstrated a strong performance, buoyed by indications from the ECB suggesting a potential rate cut in the near term.

The US dollar and the Japanese Yen will be the targets for investors fleeing riskier assets. Nonetheless, investors should consider economic data and central bank commentary throughout the week.

For the US on Thursday, jobless claims and Philly Fed Manufacturing Index numbers warrant investor attention. An unexpected spike in initial jobless claims could have more impact. Deteriorating labor market conditions would affect wage growth, reduce disposable income, and curb consumer spending.

Trade data for the Eurozone and ZEW Economic Condition numbers for Germany and the Eurozone will be in focus on Tuesday. Trade data will give the markets a view of the demand environment in Q1. The ZEW Economic Sentiment could have more influence, with the ECB expecting economic conditions to improve in H2 2024.

On Wednesday, finalized inflation figures for the Eurozone will garner investor interest. Revisions to preliminary numbers could influence the ECB rate path. The markets expect a June ECB rate cut.

On Tuesday, UK labor market data for February will impact buyer demand for the Pound. Weaker labor market conditions and softer wage growth could increase expectations of a Bank of England interest rate cut.

With inflation being the focal point, UK inflation figures for March also need consideration on Wednesday. Softer-than-expected inflation would further influence investor bets on a Bank of England rate cut.

On Friday, UK retail sales figures for March will warrant investor attention. Upward trends in consumer spending could fuel demand-driven inflation and affect the timing of a BoE rate cut.

For Japan, on Friday, inflation figures for March will warrant investor consideration. The numbers coincide with the spring wage hikes. Hotter-than-expected numbers could influence the Bank of Japan rate path.

Investors must also monitor Bank of Japan commentary and comments from the Japanese government on the Yen.

Have your trading charts ready this week!

This Week’s High Impact Events

The times below are GMT +3.

Monday 15^th April

15.30 – US – Core Retail Sales m/m, Empire State Manufacturing Index, Retail Sales m/m

Potential instruments to Trade: USD Crosses. 

Tuesday 16^th April

05.00 – China – Industrial Production y/y

Potential instruments to Trade: CNY Crosses. 

09.00 – UK – Claimant Count Change

Potential instruments to Trade: GBP Crosses. 

15.30 – Canada – CPI m/m

Potential instruments to Trade: CAD Crosses. 

20.00 – UK – BoE Gov Bailey Speaks

Potential instruments to Trade: GBP Crosses. 

20.00 – US – FOMC Member Barkin Speaks

Potential instruments to Trade: USD Crosses. 

20.15 – Canada – BoC Gov Macklem Speaks

Potential instruments to Trade: CAD Crosses. 

20.15 – US – Fed Chair Powell Speaks

Potential instruments to Trade: USD Crosses. 

Wednesday 17^th April

01.45 – New Zealand – CPI q/q

Potential instruments to Trade: NZD Crosses. 

09.00 – UK – CPI y/y

Potential instruments to Trade: GBP Crosses. 

19.00 – UK – BoE Gov Bailey Speaks

Potential instruments to Trade: GBP Crosses. 

Thursday 18^th April

04.30 – Australia – Employment Change, Unemployment Rate

Potential instruments to Trade: AUD Crosses. 

15.30 – US – Unemployment Claims

Potential instruments to Trade: USD Crosses. 

Friday 19^th April

09.00 – UK – Retail Sales m/m

Potential instruments to Trade: GBP Crosses. 

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