Key Events This Week: PMIs, Claims And Fed Minutes
Looking forward at the coming relatively quiet week, the flash PMIs for May (Friday) will be the data highlight but – as DB’s Jim Reid notes – “it’s tough to know what they’ll tell us that we don’t already know.” Having said that, as we noted previously Deutsche Bank’s equity strategist Binky Chadha has previously said that they’ll likely be an equity correction once the ISM rolls over from its current lofty peaks even as growth stays strong.
The ISM has fallen for one month from its peak so it’ll be interesting to see what the flash PMI shows as a guide. April’s composite number was the highest on record at 63.5. The Euro Area composite PMI was at 53.8, the highest since July.
Otherwise, there’ll be some further April data from the US, including on housing starts, building permits (both tomorrow) and existing home sales (Thursday), while the weekly initial jobless claims will also be in focus, after they fell to a post-pandemic low last week of 473k.
It’s also a fairly quiet week ahead on the central bank front, with the next big round of meetings not taking place until mid-June. However, there’ll be a lot of focus on Federal Reserve speakers in particular as they react to the much stronger-than expected CPI reading for April, which as we know came in at +4.2% year-on-year, the highest since 2008 last week. So far Fed speakers have largely kept to their dovish “transitory” script so it feels unlikely that anyone will go rogue. We’ll also get the minutes from the FOMC’s last meeting (Wednesday), which will be a little out of date but will be examined for tapering clues amongst other things.
Finally, it’s also quiet on the company reporting front, as Q1 earnings season continues to wind down over the week ahead, with more than 90% of the companies in the S&P 500 having now reported. There are still a few companies left however next week, including 20 from the S&P 500 and a further 27 from the STOXX 600.
A day by day week ahead, courtesy of Deustche Bank
Monday May 17
Data: China April retail sales, industrial production, Japan April PPI, US May Empire State manufacturing survey, NAHB housing market index
Central Banks: Fed’s Clarida and Bostic speak
Earnings: Ryanair, MUFG
Tuesday May 18
Data: Japan preliminary Q1 GDP, March tertiary industry index, UK March unemployment rate, Euro Area Q1 GDP second estimate, US April housing starts, building permits
Central Banks: Fed’s Kaplan and ECB’s Villeroy speak
Earnings: Walmart, Home Depot
Wednesday May 19
Data: UK April CPI, EU April new car registrations, Euro Area final April CPI, Canada April CPI
Central Banks: Federal Reserve release April FOMC minutes, ECB pulishes Financial Stability Review, Fed’s Bullard, Bostic, and ECB’s Panetta, Rehn and Lane speak
Earnings: Cisco Systems, Lowe’s, Target, TJX, Porsche
Thursday May 20
Data: Japan April trade balance, March core machine orders, Germany April PPI, US May Philadelphia Fed business outlook, weekly initial jobless claims, April leading index
Central Banks: ECB’s Lagarde, Lane, Holzmann speak, monetary policy decision from the South African Reserve Bank
Earnings: Applied Materials, EasyJet, Royal Mail
Friday May 21
Data: Flash manufacturing, services and composite PMIs for May from Australia, Japan, France, Germany, Euro Area, UK and US, Japan April nationwide CPI, UK April retail sales, Euro Area advance May consumer confidence, April existing home sales
Earnings: Deere & Company
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Finally, looking at just the US, Goldman notes that the key economic data releases this week are the mfg and service PMIs, the jobless claims report and Philadelphia Fed manufacturing index on Thursday. The minutes from the March FOMC meeting will be released on Wednesday. There are several speaking engagements from Fed officials this week.
Monday, May 17
08:30 AM Empire State manufacturing survey, May (consensus +24.0, last +26.3)
10:00 AM NAHB housing market index, May (consensus 83, last 83)
10:05 AM Fed Vice Chair Clarida (FOMC voter) speaks: Fed Vice Chair Richard Clarida will give opening remarks at the Atlanta Fed’s Financial Markets Conference. Prepared text is expected.
10:25 AM Fed Vice Chair Clarida (FOMC voter) and Atlanta Fed President Bostic (FOMC voter) speak: Fed Vice Chair Richard Clarida and Atlanta Fed President Raphael Bostic will have an armchair discussion during the Atlanta Fed’s Financial Markets Conference.
06:00 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated Q&A hosted by the Dallas Fed.
Tuesday, May 18
08:30 AM Housing starts, April (GS -2.5%, consensus -2.0%, last +19.4%); Building permits, April (consensus +0.6%, last +2.3%): We estimate housing starts decreased by 2.5% in April. Our forecast incorporates higher mortgage rates and mean reversion after a large increase in March.
11:05 AM Atlanta Fed President Bostic (FOMC voter) and Dallas Fed President Kaplan (FOMC non-voter) speak: Dallas Fed President Robert Kaplan will participate in a panel discussion moderated by Atlanta Fed President Raphael Bostic at the Atlanta Fed’s Financial Markets Conference.
Wednesday, May 19
10:00 AM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will discuss the outlook for the economy and monetary policy at a virtual event hosted by OMFIF. Q&A is expected.
11:35 AM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will be interviewed during a Businessweek/Bloomberg Live event.
02:00 PM Minutes from the April 28-29 FOMC meeting: At its April meeting, the FOMC left the funds rate target range unchanged at 0–0.25%, as widely expected. The April FOMC statement noted that the economy had strengthened due to progress on vaccinations, strong policy support, and improvement in the sectors most adversely affected by the pandemic.
Thursday, May 20
08:30 AM Philadelphia Fed manufacturing index, May (GS 45.0, consensus 41.5, last 50.2): We estimate that the Philadelphia Fed manufacturing index declined by 5.2pt to 45.0 in May, after rising to the highest level since 1973 in April.
08:30 AM Initial jobless claims, week ended May 15 (GS 450k, consensus 455k, last 473k); Continuing jobless claims, week ended May 8 (consensus 3,640k, last 3,655k): We estimate initial jobless claims decreased to 450k in the week ended May 15.
10:30 AM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated Q&A hosted by Borderplex Alliance.
Friday, May 21
09:45 AM Markit Flash US manufacturing PMI, May preliminary (consensus 60.2, last 60.5)
09:45 AM Markit Flash US services PMI, May preliminary (consensus 64.5, last 64.7)
10:00 AM Existing home sales, April (GS +1.5%, consensus +1.1%, last -3.7%): We estimate that existing home sales increased by 1.5% in April after declining by 3.7% in March. Existing home sales are an input into the brokers’ commissions component of residential investment in the GDP report.
Source: DB, Goldman, BofA
Mon, 05/17/2021 – 09:40