Economic Data Overview

 

The economic data calendar is quite sparse in the April 4 week, with no reports expected to have a significant market impact. However, a busy schedule of central bank announcements will give markets plenty to think about, including the FOMC meeting minutes from March 15. The most important release of the week is likely to be the ISM Non-Manufacturing Index for March on Tuesday. The indexes for the manufacturing sector have been fairly strong of late. Should the data suggest that services are moving in the same direction, it will help the case for a more upbeat outlook for a sustainable economic recovery. However, plunges in consumer confidence and jumps in input costs like gasoline may restrain the activity in the services sector. Four central banks make routine monetary policy announcements during the week. The Reserve Bank of Australia will issue its statement on Tuesday and will probably keep the cash rate at 4.75% unless there have been further negative impacts from the Queensland floods, or in the global economy which could result in deterioration in the domestic economy. In its February 1 announcement, rates were still considered "appropriate" in the outlook at the time. Expectations for rate hikes at the Bank of England and the ECB have been on the rise along with commodities costs. The BOE Monetary Policy Committee meets on Wednesday and Thursday. Recent votes have shown a shift in balance away from holding rates and asset purchases steady to increasing the rate and reducing assets bought, although most focus is on the May meeting. The ECB has signalled "strong vigilance" in regard to price increases. This has widely been interpreted as an indication that the ECB will raise rates and the Governing Council could act after the meeting on Thursday to reduce perceived risks to medium-term price stability. The Bank of Japan Policy Board meets on Wednesday and Thursday. Further steps to provide liquidity may be undertaken as the country struggles to recover from the earthquake and tsunami on March 11 and as the crisis at the nuclear power plants drags on. The Federal Reserve will release the minutes of the March 15, 2010 FOMC meeting on Tuesday. Although there was no hint of dissent in the 10-0 vote at the meeting, subsequent remarks by some District Bank Presidents suggest more...Read more