MNI GLOBAL WEEK AHEAD: BOE Rate Decision Due

MONDAY

Germany Industrial Production: After March factory orders saw a marked drop, German IP is anticipated to contract by -1.3% m/m in March, after the auto industry drove a +2.0% m/m March expansion.

Looking forward, the April manufacturing PMI signalled continued headwinds to demand, as firms reduce stock levels and overall purchasing hesitancy prevails. Destatis flagged backlogs being sufficient for 7.5 months of continued production in the latest February data, implying overall production will be buffered for now despite waning demand.

TUESDAY

US NFIB Sentiment: After softening to a three-month low in March, the US NFIB Small Business Optimism Index is seen edging down by 0.4 points to 89.7. Overall business optimism is struggling, having remained below the historical average for 15 months now, with firms investment plans remaining conservative as wariness persists.

WEDNESDAY

Germany Final HICP: German harmonised inflation is likely to confirm +0.6% m/m and +7.6% y/y flash estimates, which were both 0.2pp softer than consensus expectations and 0.2pp softer than the March level of +7.8% y/y. Energy prices re-accelerated in Germany in April, mirroring similar moves in French, Italian and Spanish April inflation data due to base-effects.

The flash CPI data pointed towards a small deceleration in Wednesday’s core HICP print for Germany, after having risen to a fresh high of +5.9% y/y in March. This would largely be due to softer goods inflation.

Norway CPI: Norwegian CPI is expected to cool by 0.3 points to +6.2% y/y in April, after surprising to the upside in March, accelerating across both CPI y/y and underlying CPI-ATE. Norges Bank raised its policy rate by 25bp to 3.25% in May, adding that the next move would most likely be a further hike in June, warning that the policy rate path may be higher than it previously anticipated if krone weakness persists.

US CPI: Consenus is looking for US CPI to hold steady at +5.0% y/y in April, whilst core edges down 0.2pp to +5.4% y/y. Prices are seen accelerating by +0.4% m/m, with core to slow to +0.3% m/m. Core CPI inflation eased from 0.45% to 0.385% m/m in April, but remains stubbornly high, with the main downside surprise from a sharp slowing in rents. Barring unexpected developments this summer, the Fed’s tightening cycle looks like it has concluded at a terminal rate of 5.00-5.25% following the 25bp hike at the May FOMC meeting.

THURSDAY

Bank of England Rate Decision: The BOE’s May rate decision hangs in the balance at present. Markets are pricing around 20bp, with the Bloomberg consensus leaning towards a 25bp hike, after April wage and inflation data signalled persistent price pressures. Yet with rhetoric from the BOE often highlighting the delayed transmission of the Bank Rate, a pause is firmly on the table, which would break a streak of twelve consecutive hikes.

US PPI: PPI inflation is expected to tick up to +0.3% m/m in April, after having has slowed more notably in the past two months. The recent decline reflects the improvement in supply chain pressures although it hasn’t yet fully fed through to core CPI underlying goods.

FRIDAY

UK Q1 GDP: UK Q1 flash GDP is expected at +0.1% q/q, holding pace with the marginal +0.1% q/q growth in Q4. This is stronger than the BOE’s last March projections which forecasted a -0.1% q/q Q1 reading.

UK GDP should see positive contribution from retail a +0.03pp contribution to GDP in Q1 (after a -0.05pp Q4 contribution) and PMI data suggest an expansive March services print to generate a positive Q1 contribution. Industrial production is likely to drag after contracting in January and February.

France Final HICP: French inflation was two tenths stronger than consensus expectations in the M/M and Y/Y flash HICP data for April. HICP rose +0.7% m/m and +6.9% y/y, accelerating by 0.2pp on the annualised print. Energy base-effects were the key upwards driver. Manufactured goods CPI edged down, whilst services accelerated by 0.3pp to +3.2% y/y, implying an overall increase and fresh high for core CPI (to be released with final print).

Spain Final HICP: Spanish harmonised inflation re-accelerated in April, up +0.5% m/m whilst rising 0.7pp to +3.8% y/y. Energy base-effects were largely responsible for the April CPI uptick. Core CPI decelerated substantially in the April flash, also mainly due to cooling goods inflation.

US Prelim Michigan Sentiment: U.Mich sentiment is projected at 63.0 in the prelim May print, 0.5 points softer than in April. Focus will largely be on inflation expectations after the April 1.0pp surge to 4.6% for the 1y inflation expectations (the highest since November 2022).

BOE Bank Rate:

Date	GMT/Local	Impact	Flag	Country	Event
08/05/2023	0030/0930	**		JP	IHS Markit Final Japan Services PMI
08/05/2023	0130/1130	*		AU	Building Approvals
08/05/2023	0600/0800	**		DE	Industrial Production
08/05/2023	1400/1000	**		US	Wholesale Trade
08/05/2023	1400/1600			EU	ECB Lane Speech/Q&A at Forum New Economy
08/05/2023	1500/1100	**		US	NY Fed survey of consumer expectations
08/05/2023	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
08/05/2023	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
09/05/2023	2301/0001	*		UK	BRC-KPMG Shop Sales Monitor
09/05/2023	0645/0845	*		FR	Foreign Trade
09/05/2023	0800/1000			EU	ECB Lane in Policy Panel at IMF event
09/05/2023	1000/0600	**		US	NFIB Small Business Optimism Index
09/05/2023	1230/0830			US	Fed Governor Philip Jefferson
09/05/2023	1255/0855	**		US	Redbook Retail Sales Index
09/05/2023	1400/1000	**		US	IBD/TIPP Optimism Index
09/05/2023	1605/1205			US	New York Fed's John Williams
09/05/2023	1700/1900			EU	ECB Schnabel Lecture at Hessischer Kreis e.V.
09/05/2023	1700/1300	***		US	US Note 03 Year Treasury Auction Result
10/05/2023	0600/0800	***		DE	HICP (f)
10/05/2023	0600/0800	*		NO	CPI Norway
10/05/2023	0600/0800	**		SE	Private Sector Production
10/05/2023	0800/1000	*		IT	Industrial Production
10/05/2023	0900/1000	**		UK	Gilt Outright Auction Result
10/05/2023	1100/0700	**		US	MBA Weekly Applications Index
10/05/2023	1230/0830	*		CA	Building Permits
10/05/2023	1230/0830	***		US	CPI
10/05/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
10/05/2023	1700/1300	**		US	US Note 10 Year Treasury Auction Result
10/05/2023	1800/1400	**		US	Treasury Budget
11/05/2023	1100/1200	***		UK	Bank Of England Interest Rate
11/05/2023	1200/1400			EU	ECB Schnabel Talk at Federal Ministry of Finance
11/05/2023	-			EU	ECB Lagarde & Panetta in G7 Finance Meeting
11/05/2023	1230/0830	**		US	Jobless Claims
11/05/2023	1230/0830	**		US	WASDE Weekly Import/Export
11/05/2023	1230/0830	***		US	PPI
11/05/2023	1415/1015			US	Fed Governor Christopher Waller
11/05/2023	1430/1030	**		US	Natural Gas Stocks
11/05/2023	1700/1300	***		US	US Treasury Auction Result for 30 Year Bond
11/05/2023	1730/1930			EU	ECB de Guindos Panels Diario Madrid Foundation Event
12/05/2023	0600/0700	**		UK	UK Monthly GDP
12/05/2023	0600/0700	***		UK	GDP First Estimate
12/05/2023	0600/0700	***		UK	Index of Production
12/05/2023	0600/0700	**		UK	Trade Balance
12/05/2023	0600/0700	**		UK	Index of Services
12/05/2023	0600/0700	**		UK	Output in the Construction Industry
12/05/2023	0600/0800	**		NO	Norway GDP
12/05/2023	0645/0845	***		FR	HICP (f)
12/05/2023	0700/0900	***		ES	HICP (f)
12/05/2023	0800/1000			EU	ECB de Guindos Lecture at Academia Europea Leadership
12/05/2023	1115/1215			UK	BOE Pill & Shortall Monetary Policy Report National Agency Briefing
12/05/2023	1230/0830	**		US	Import/Export Price Index
12/05/2023	1400/1000	***		US	University of Michigan Sentiment Index (p)
12/05/2023	1600/1200	***		US	USDA Crop Estimates - WASDE