MNI GLOBAL MORNING BRIEFING: US Trade Deficit in Focus

Tuesday’s early data schedule includes French IP in the morning, final March global services PMI prints and the US trade balance for February. It is worth noting that February data represents more of a benchmark for comparing post-Ukraine invasion effects in upcoming months.

RBA Rate Decision (0530 BST) - Recap

The latest rate decision saw the Reserve Bank of Australia leave monetary policy unchanged at the 0.10% cash rate. Labour market resilience, persistently proving stronger than expectations remains the key point of confidence, despite headline inflation reaching +3.5% in Q4. The RBA reconfirmed that inflation spillover from the global pressures remain small.

French Industrial Production (0745 BST)

The February data will likely see French IP weaker on the month at -0.4% m/m (Jan +1.6%) albeit stronger on the year at +2.6% y/y (Jan -1.5%). January saw an upside surprise on the back of boosted petroleum and pharmaceutical production.

S&P Global Final Service PMIs

The Service S&P PMIs (previously IHS) will weigh up expansion in services as Omicron-wave restrictions eased with dampened consumer confidence on the back of surging inflation and concerns regarding the Ukraine war.

First and final prints are expected to see Spanish and Italian services soften to 54.3 and 51.5 respectively (Feb 56.6 and 52.8). The larger dip for Spain is likely to reflect a starker disposable income squeeze due to an especially high inflation rate which jumped 2.2pp to +9.8% y/y in March.

Also of interest will be the Russian print, for which analysts are seeing a 6.1-point drop to a contractive 46.0 services PMI reading as inflation soars and shortages from imposed sanctions hit the economy.

Final prints are seen confirming service PMIs for France (March 57.4, Feb ), Germany (March 55.0, Feb ), Eurozone (March 54.8, Feb), the UK (March 61.0, Feb ) and the US (March 58.9, Feb ).

US Trade Balance (1330 BST)

February’s trade balance is seen reducing by $1.4b to -$88.5b from January’s record high as a result of soaring energy cost inflation.

US ISM Services PMI (1500 GMT)

The ISM services PMI is projected to increase 1.9 points to 58.4 for March, following three months of decline. The S&P services PMI saw a substantial upside surprise in the March print, as demand saw strong recoveries with easing pandemic restrictions. Consumer confidence effects due to the war in Ukraine remain largely undamaging in the US.

Today's key policymaker appearances on the schedule include ECB's Luis de Guindos at the Ecofin conference, followed by Minneapolis Fed's Neel Kashkar, Fed Governor Lael Brainard, San Francisco Fed's Mary Daly and NY Fed's John WIlliams. Where available, links to events can be found in the calendar below.

Date	GMT/Local	Impact	Flag	Country	Event
05/04/2022	0430/1430	***		AU	RBA Rate Decision
05/04/2022	0630/0830	**		SE	Services PMI
05/04/2022	0645/0845	*		FR	Industrial Production
05/04/2022	0715/0915	**		ES	IHS Markit Services PMI (f)
05/04/2022	0745/0945	**		IT	IHS Markit Services PMI (f)
05/04/2022	0750/0950	**		FR	IHS Markit Services PMI (f)
05/04/2022	0755/0955	**		DE	IHS Markit Services PMI (f)
05/04/2022	0800/1000	**		EU	IHS Markit Services PMI (f)
05/04/2022	0830/0930	**		UK	IHS Markit/CIPS Services PMI (Final)
05/04/2022	-			EU	ECB's de Guindos attends Ecofin
05/04/2022	1230/0830	**		CA	International Merchandise Trade (Trade Balance)
05/04/2022	1230/0830	**		US	Trade Balance
05/04/2022	1255/0855	**		US	Redbook Retail Sales Index
05/04/2022	1345/0945	***		US	IHS Markit Services Index (final)
05/04/2022	1400/1000			US	Minneapolis Fed's Neel Kashkari and Fed Governor Lael Brainard
05/04/2022	1400/1000	***		US	ISM Non-Manufacturing Index
05/04/2022	1630/1230			US	San Francisco Fed's Mary Daly
05/04/2022	1800/1400			US	New York Fed's John Williams