MNI Global Morning Briefing: US Consumer Confidence Seen Higher

The main data events Tuesday include Italian business and consumer confidence figures at 0900BST, followed by the CBI distributive trades survey at 1100BST. In the US, the consumer confidence will be closely watched at 1500BST.

Italian consumer sentiment seen higher

Consumer confidence fluctuated in recent months and eased to 100.9 in March after edging up to 101.4 in the previous month. In April, markets look for a renewed uptick to 101.6. March's drop was broad-based with every category recording a small decline. On the other hand, business confidence ticked up marginally by 0.6pt to 93.9. The easing of restrictions at the end of April is likely to provide a boost to both consumer and business sentiment going forward. Meanwhile, manufacturing confidence is forecast to rise to 102.1 in April, up from 101.2 seen in March. Survey evidence suggests that the manufacturing sector is expanding further. The EZ flash manufacturing PMI, which also includes Italian data, rose to a record high according to the April flash report.

Source: Istat

CBI UK retail sales expected to rebound

CBI UK retail sales volumes are expected to rebound to 10 in April, its highest level since September 2020, after recording sharp declines in the last three months of lockdown. Non-essential businesses, especially in sectors such as clothing and footwear, saw severe declines in sales in the year to March, the survey noted.

Looking ahead, the gradual reopening of the economy starting in mid-April should provide a boost to retail sales in the coming months as well. However, sales volumes are compared to very low levels from 2020, which will be reflected in the data, especially in Q2. March's survey noted that sales volumes are likely to remain poor for the time of year next month.

US consumer confidence projected to rise

Consumer confidence rose to a 1-year high of 109.7 in March and markets expect the indicator to improve further in April to 112.0. This would mark the fourth consecutive monthly gain and the highest level since March 2020 when the index recorded 120.0. In March, both the present situations index and the expectations increased to 110.0 and 109.6, respectively. The improvement of the current situation, together with increasing purchasing intentions suggest that the economy is growing in the coming months, the report noted. However, inflation concerns rose according to March's survey.

Similar survey evidence is in line with market forecasts. The preliminary Michigan consumer sentiment index increased as well in April to a 1-year high, mainly on the back of improving current conditions.

The highlights on the events calendar include day one of the the FOMC policy meeting and BOC's Tiff Macklem testifying at the Parliamentary committee.