Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Tuesday kicks off with the publication of UK public sector finances at 0700BST, followed by the German Ifo business climate indicator at 0900BST. In the US the release of the consumer confidence index at 1500BST will be closely watched.
UK borrowing seen higher in April
April's public sector finances release will be the first of the new financial year 2021/22. In the past financial year, borrowing was GBP 24.3bn less than the OBR expected, as the impact of the winter lockdowns was smaller than anticipated. Nevertheless, year-to-date borrowing was still the highest borrowing since records began in 1947. In April, borrowing (excluding banking groups) is expected to register at GBP 32.0bn, after recording GBP 28.0bn in March.
German Ifo business climate seen at 2-year high
The Ifo business climate indicator is expected to rise to a two-year high of 98.1 in May, which would mark the fourth consecutive increase. Company's assessment of the current situation is expected to improve further to 95.5, hitting the highest level since the start of the pandemic. Expectations eased slightly in April due to concerns over a third wave of infections and bottlenecks in intermediate products. In May, markets are looking for a renewed uptick to 101.0.
Vaccinations are gaining momentum with around 38% of the population having been vaccinated at least once. However, surveys suggest that supply chain issues persist, which is likely to weigh on the outlook.
Source: Ifo Institute
US consumer confidence expected to ease
Consumer sentiment rose sharply in April to 121.7, up from 109.0 seen in March and hitting the highest level since February 2020. April's increase was driven by the present situations index, which surged by 29.5 points to 139.6, while expectations ticked up 1.5 points to 109.8. The survey noted that consumers were more upbeat about their income prospects, likely because of the improving job market. In May, markets expect consumer confidence to ease slightly to 119.8.
Other survey evidence shows a similar picture. The flash Michigan consumer sentiment index dropped to 82.8 in May, due to higher inflation expectations. The survey saw annual expected inflation rising to the highest level in a decade.
The highlights of the events calendar include speeches by Chicago Fed's Charles Evans, Richmond Fed's Tom Barkin, ECB's Philip Lane and Fed's Randal Quarles.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.