MNI GLOBAL WEEK AHEAD: UK CPI in Focus

The week ahead will see eurozone consumer and business sentiment indicators and May flash PMIs in focus.

MONDAY

Eurozone Flash Consumer Confidence: Consensus is pencilling in just under a one-point improvement from -17.5 in the May flash consumer sentiment indicator for the eurozone. Post-pandemic reopening effects, lower energy costs and fading recessionary fears have boosted eurozone consumer sentiment over recent months. The indicator is sitting over ten points higher than the Sep '22 record low and the least negative since the Feb '22 level (pre-Russia-Ukraine war).

Further detail will be released a week later, whereby we will be looking for a continuation in cooling consumer price expectations, after in April they were the softest since December 2020.

TUESDAY

May Flash PMIs: Across Europe, May PMIs are expected to show continued weakness in the manufacturing sector, set to remain firmly in contractive territory, whilst the US teeters on the edge of stalling business activity. Services PMIs are likely to cool somewhat but remain strong as robust demand prevails.

WEDNESDAY

RBNZ Rate Decision: The Reserve Bank of New Zealand will likely increase the Official Cash Rate again at its May 24 meeting, with markets and commentators tipping another 25-50bp from its current 5.25% despite emerging signs of moderating inflationary pressures. The market will watch closely for an update to the peak rate forecast. See our RBNZ watch here for more: https://marketnews.com/mni-rbnz-watch-hike-expecte...

UK Inflation Report: UK inflation is expected to cool by 1.9pp to +8.1% y/y in April, whilst prices continue to tick up on a short-term basis by +0.6% m/m. Core CPI is holding steady again at +6.2% y/y for a third consecutive month, underscoring sticky-core concerns at the BOE.

At the May policy meeting, the BOE upgraded its inflation forecasts for the 12-month horizon, with 2024 Q2 CPI seen at 3.4%, up from 1.0% expected in the February forecasting round. 2023 Q2 CPI is seen 0.3pp lower at +8.2%. The bulk of upside revision was due to stronger food inflation, currently running at a historical high. The MPC projection point to inflation risks as "skewed significantly to the upside".

Germany IFO Survey: The IFO survey is expected to ease slightly across the business climate, current and expectations indicators in May, after business sentiment edged up for a sixth consecutive month in April. Easing energy prices, cooling CPI and less-bleak global demand outlooks have assisted the recent recovery. However, with the German manufacturing PMI slipping further into contractionary territory and ZEW expectations taking another hit in May, growth optimism is faltering.

US FOMC Minutes: The May FOMC delivered a 25bp hike, which is looking like the last of the cycle. The minutes will be closely watched on Wednesday for a hint of a pause at the June meeting.

THURSDAY

Germany Consumer Confidence / Final GDP: Germany’s forward-looking GfK consumer sentiment indicator is projected to improve by a further 1.4 points to -24.3 in June, representing an eighth consecutive increase. Both economic and income expectations rebounded significantly recently, with income expectations alone recovered to pre-Russia-Ukraine war levels.

Nonetheless, the indicator remains below pre-pandemic levels, with the propensity to buy subindex remaining downtrodden.

Final Q1 GDP data is also due, likely to confirm that the eurozone’s largest economy stalled in Q1 at 0.0% q/q growth. A downside revision would see the German economy having dipped into a technical recession, following the -0.4% q/q Q4 contraction. The release will include detail on GDP aggregates, which will likely see another fall in household consumption, with retail activity having contracted m/m for all of Q1 (albeit with some revival in the service sector).

France Manufacturing Sentiment: French manufacturing sentiment will likely remain downtrodden in May, after dipping by three points in April to 101. This was the lowest since November as overall order books and firms' production expectations fell.

US GDP: The US GDP second estimate for Q1 follows the first estimate of +1.1% q/q annualised, a deceleration from +2.6% q/q recorded in Q4 2022. The +3.7% annualised jump in consumer spending despite stubbornly high inflation is likely to ease off in Q2.

FRIDAY

UK Retail Sales: Consensus is forecasting a small improvement in April retail sales to +0.2% m/m, after the March dip, whereby wet weather conditions supported the -0.9% m/m contraction. The May consumer sentiment indicator posted a fourth consecutive improvement, albeit remains firmly in pessimistic territory, implying little rebound in spending for now.

France Consumer Sentiment: French consumer confidence is expected to edge up another point in May to 84, remaining markedly below the long-run average of 100. With the propensity to make major purchases having recently weakened further, French consumer spending looks to remain pressured for the near future.

Italy Consumer / Business Sentiment: Italian consumer confidence is seen edging up again after rising to a February 2022 high of 105.5. Business sentiment is seeing cooling for a second month, due to soft production and order book expectations.

US Durable Goods Orders / Personal Income & Consumption: The April preliminary data is expected to show a -1.0% m/m contraction in durable goods orders, after aircraft orders underpinned the strong +3.2% m/m March reading. Excluding transportation, a more modest -0.2% m/m decline is pencilled in, following +0.2% m/m in March. Demand conditions in the US remain muted, with the ISM manufacturing PMI New Orders subindex signalling an eight-month trend of falling orders in April, albeit the rate of which is now easing.

US personal income and spending data for April is also due, expected to grow +0.4% m/m for both, an uptick from stalling spending in March. Services spending will likely again outweigh softer goods outlays.

Date	GMT/Local	Impact	Flag	Country	Event
22/05/2023	0900/1100	**		EU	Construction Production
22/05/2023	0900/1100			EU	ECB de Guindos Opens ECB/EIOPA Workshop
22/05/2023	0900/1100			EU	ECB Elderson Guest Lecture Utrecht University
22/05/2023	1230/0830			US	St. Louis Fed's James Bullard
22/05/2023	1400/1600	**		EU	Consumer Confidence Indicator (p)
22/05/2023	1415/1615			EU	ECB Lane Panels OeNB Economics SUERF Conference
22/05/2023	1430/1530			UK	DMO Quarterly Investor/GEMM Consultation Meetings
22/05/2023	1500/1100			US	Fed's Tom Barkin, Raphael Bostic
22/05/2023	1505/1105			US	San Francisco Fed's Mary Daly
22/05/2023	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
22/05/2023	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
22/05/2023	1600/1700			UK	DMO Quarterly Investor/GEMM Consultation Meetings
23/05/2023	2300/0900	***		AU	Judo Bank Flash Australia PMI
23/05/2023	0030/0930	**		JP	Jibun Bank Flash Japan PMI
23/05/2023	0600/0700	***		UK	Public Sector Finances
23/05/2023	0715/0915	**		FR	S&P Global Services PMI (p)
23/05/2023	0715/0915	**		FR	S&P Global Manufacturing PMI (p)
23/05/2023	0715/0915			EU	ECB de Guindos Address at European Financial Integration Conf
23/05/2023	0730/0930	**		DE	S&P Global Services PMI (p)
23/05/2023	0730/0930	**		DE	S&P Global Manufacturing PMI (p)
23/05/2023	0800/1000	**		EU	EZ Current Account
23/05/2023	0800/1000	**		EU	S&P Global Services PMI (p)
23/05/2023	0800/1000	**		EU	S&P Global Manufacturing PMI (p)
23/05/2023	0800/1000	**		EU	S&P Global Composite PMI (p)
23/05/2023	0830/0930	***		UK	S&P Global Manufacturing PMI flash
23/05/2023	0830/0930	***		UK	S&P Global Services PMI flash
23/05/2023	0830/0930	***		UK	S&P Global Composite PMI flash
23/05/2023	0900/1000	*		UK	Index Linked Gilt Outright Auction Result
23/05/2023	0915/1015			UK	BOE Bailey, Pill, Tenreyro, Mann at MPR Hearing
23/05/2023	1230/0830	*		CA	Industrial Product and Raw Material Price Index
23/05/2023	1230/0830	**		US	Philadelphia Fed Nonmanufacturing Index
23/05/2023	1255/0855	**		US	Redbook Retail Sales Index
23/05/2023	1300/0900			US	Dallas Fed's Lorie Logan
23/05/2023	1345/0945	***		US	IHS Markit Manufacturing Index (flash)
23/05/2023	1345/0945	***		US	S&P Global Services Index (flash)
23/05/2023	1400/1000	***		US	New Home Sales
23/05/2023	1400/1000	**		US	Richmond Fed Survey
23/05/2023	1445/1545			UK	BOE Haskel Panellist at Richmond Fed Conference
23/05/2023	1530/1130	*		US	US Treasury Auction Result for Cash Management Bill
23/05/2023	1700/1300	*		US	US Treasury Auction Result for 2 Year Note
24/05/2023	0200/1400	***		NZ	RBNZ official cash rate decision
24/05/2023	0600/0700	***		UK	Consumer inflation report
24/05/2023	0600/0700	***		UK	Producer Prices
24/05/2023	0800/1000	***		DE	IFO Business Climate Index
24/05/2023	0830/0930	*		UK	ONS House Price Index
24/05/2023	0930/1030			UK	BOE Bailey Keynote Speech at Mansion House Net Zero Summit
24/05/2023	1000/1100	**		UK	CBI Industrial Trends
24/05/2023	1100/0700	**		US	MBA Weekly Applications Index
24/05/2023	1230/0830	*		CA	Quarterly financial statistics for enterprises
24/05/2023	1300/1500	**		BE	BNB Business Sentiment
24/05/2023	1300/1400			UK	BOE Bailey Frieside Chat at WSJ CEO Council Summit
24/05/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
24/05/2023	1530/1130	**		US	US Treasury Auction Result for 2 Year Floating Rate Note
24/05/2023	1700/1300	*		US	US Treasury Auction Result for 5 Year Note
24/05/2023	1745/1945			EU	ECB Lagarde Opens Anniversary of ECB Event
24/05/2023	1800/1400	*		US	FOMC Statement
25/05/2023	0600/0800	***		DE	GDP (f)
25/05/2023	0600/0800	*		DE	GFK Consumer Climate
25/05/2023	0600/0800	**		SE	Unemployment
25/05/2023	0645/0845	**		FR	Manufacturing Sentiment
25/05/2023	0700/0900	**		ES	PPI
25/05/2023	0900/1100			EU	ECB de Guindos Presents ECB Annual Report 2022
25/05/2023	1000/1100	**		UK	CBI Distributive Trades
25/05/2023	1100/0700	*		TR	Turkey Benchmark Rate
25/05/2023	1230/0830	**		US	Jobless Claims
25/05/2023	1230/0830	**		US	WASDE Weekly Import/Export
25/05/2023	1230/0830	*		CA	Payroll employment
25/05/2023	1230/0830	***		US	GDP
25/05/2023	1400/1000	**		US	NAR Pending Home Sales
25/05/2023	1430/1030	**		US	Natural Gas Stocks
25/05/2023	1430/1030			US	Boston Fed's Susan Collins
25/05/2023	1500/1100	**		US	Kansas City Fed Manufacturing Index
25/05/2023	1630/1730			UK	BOE Haskel Speech at Peterson Institute
25/05/2023	1700/1300	**		US	US Treasury Auction Result for 7 Year Note
26/05/2023	2330/0830	**		JP	Tokyo CPI
26/05/2023	0130/1130	**		AU	Retail Trade
26/05/2023	0600/0700	***		UK	Retail Sales
26/05/2023	0600/0800	**		SE	Retail Sales
26/05/2023	0600/0800	**		SE	PPI
26/05/2023	0645/0845	**		FR	Consumer Sentiment
26/05/2023	0740/0940			EU	ECB Lane Panels Dubrovnik Econ Conference
26/05/2023	0800/1000	**		IT	ISTAT Business Confidence
26/05/2023	0800/1000	**		IT	ISTAT Consumer Confidence
26/05/2023	1230/0830	**		US	Durable Goods New Orders
26/05/2023	1230/0830	**		US	Personal Income and Consumption
26/05/2023	1230/0830	**		US	Advance Trade, Advance Business Inventories
26/05/2023	1400/1000	***		US	Final Michigan Sentiment Index
26/05/2023	1500/1100			CA	Finance Dept monthly Fiscal Monitor (expected)