– New Zealand inflation data may beat expectations as agricultural and energy commodities rebounded significantly in the first quarter.
– Chinese growth likely slowed down at the start of 2019 relative to the end of 2018, and the US-China trade war will probably be blamed.
– Inflation data due from Canada and the UK should show that price pressures are continuing to rebound across the developed world.
Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
04/16 TUESDAY | 22:45 GMT | NZD CONSUMER PRICE INDEX (1Q)
Despite the expected decline in inflation readings, traders may want to be alert for potentially better than expected price pressures. New Zealand Terms of Trade likely rebounded in Q1’19 because of a sharp rebound in milk product prices. The New Zealand Global Dairy Trade (GDT) Price Index was up nearly 17% in the first quarter, which should have helped inflation readings stabilize. As such, even if inflation remains below the RBNZ’s medium-term target of +2%, a ‘beat’ on the data may see rates markets fail to become any more dovish than they currently are priced.
Read the full report: Q1’19 New Zealand CPI & NZDUSD Price Forecast
04/17 WEDNESDAY | 02:00 GMT | CNY CHINA GROSS DOMESTIC PRODUCT (1Q)
According to a Bloomberg News survey, the Chinese economy is due to have grown by 6.3% annualized in the first quarter, a slight decline from the 6.4% annualized rate in Q4’18. The Chinese economy, according to Chinese Premier Li Keqiang, is set to grow at a pace of 6% to 6.5% in 2019, a slower than the 6.5% growth target in 2018. As the Chinese government ‘guides’ growth rates lower as the economy matures, one can’t dismiss the fact that growth readings are the lowest in three decades.
Read the full report: Q1’19 China GDP & USDCNH Price Forecast
04/17 WEDNESDAY | 08:30 GMT | GBP Consumer Price Index (MAR)
Rebounding energy prices over the past several months have seen inflation readings across the developed world stabilize at the start of 2019; the UK Consumer Price Index should be no different. The upcoming March UK inflation report is due to show headline inflation due in at +2.0% from +1.9% (y/y), while the monthly reading is due in a 0.2% from 0.5%. Core CPI is expected to have increased to 1.9% from 1.8% (y/y).
Read the full report: March UK Inflation & GBPJPY Price Forecast
04/17 WEDNESDAY | 12:30 GMT | CAD CONSUMER PRICE INDEX (MAR)
The ongoing rebound in energy prices over the past several months means that Canada inflation data should have stabilized; Crude Oil prices were up another 5.1% in March and were up by 32.5% in Q1’19. As a result, a Bloomberg News survey forecasts thatheadline CPI is due in at 1.9% (y/y), a meaningful increase from 1.5%, and the monthly reading is due in at 0.7% (m/m), as it was in February.
Read the full report: March Canada Inflation & USDCAD Price Forecast
04/18 THURSDAY | 01:30 GMT | AUD EMPLOYMENT CHANGE AND UNEMPLOYMENT RATE (MAR)
Despite ongoing trade tensions between its largest trading partners, the Australian economy has continued to chug along, steadily adding jobs for eight consecutive months. If the Bloomberg News survey is correct, March will make it nine months in a row with positive jobs growth. Australian employment is due to have increased by 15K in March after adding 4.6K jobs in February. Overall, the Australian jobs market only has seen two months of contraction since October 2016.
Read the full report: March Australia Jobs Report & AUDJPY Price Forecast
FX TRADING RESOURCES
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— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher, email him at email@example.com