Week ahead: Markets to Focus on US CPI, PPI and Retail Sales and Bank of Canada Rate Statement

　　

What happened in the market last week?

• In its April meeting, the Reserve Bank of New Zealand raised its official cash rate to 5.25%, the highest since December 2008. 
• As expected, the Reserve Bank of Australia kept its cash rate at 3.6% during its April meeting, marking the first pause in its rate-hiking cycle since May 2022. 
• In March 2023, US unemployment dropped to 3.5%, lower than the expected 3.6%. 
• The US economy created 236K jobs in March, lower than the forecasted 239K, due to mild weather and seasonal factors after strong job gains in the first two months of the year.

Last Week Market Pair Changes (All data is taken from the MT4 VT Markets)

The US dollar saw a slight dip as some markets remained in holiday mode. However, towards the end of the week, the USD gained strength due to better-than-expected job reports released by the US.

• XAUUSD gold rose 1.81% in a week but could see a fall amid a rise in yields.
• Major US stock indexes had mixed results last week. DJ30 rose by 0.74% and NAS100 decreased by 0.64%.
• EURUSD rose by 0.54%, while GBPUSD increased by 0.73%.
• The USOUSD remained stable with oil prices stagnating following the “shock OPEC+ cuts”. However, the pair experienced a slight decrease of 0.36%.
• The USDX decreased by 0.55%.
• The USDJPY fell by 0.92%.

What to focus on this week?

As we begin a new week, the financial world is buzzing with anticipation of some economic reports. All eyes will be on the Bank of Canada Rate Statement and FOMC Meeting Minutes, alongside the eagerly awaited CPI, PPI and Retail Sales data release in the US. These reports are crucial for traders navigating the markets and making informed decisions. 

Here are key events to watch out for:

Consumer Price Index (CPI) | US (April 12)

The CPI in the US rose 0.4% month-on-month in February 2023, after rising 0.5% in January.

For March, analysts expect the reading to increase by 0.3%

Bank of Canada Rate Statement | (April 12) 

As previously signalled, the Bank of Canada kept its overnight rate target steady at 4.5% during its March 2023 meeting.

The central bank stated that it intends to maintain the current rate if the economic conditions align with the latest Monetary Policy Report’s expectations. 

FOMC Meeting Minutes | US (April 13)

The Fed raised the fed funds rate by 25bps to 4.75%-5% in March 2023, matching the February increase, and pushing borrowing costs to new highs since 2007, as inflation remains elevated.

The decision came in line with expectations from most investors, although some believed the central bank should pause the tightening cycle to shore up financial stability.

Employment Change | Australia (April 13)

Employment in Australia created an additional 64,600 jobs to reach 13.83 million in February 2023, surpassing market predictions of 48,500, following a downward revision of 10,900 jobs in the previous month.

Analysts expect employment will add 20,000 jobs in March 2023.

Gross Domestic Product (GDP) | UK (April 13)

The British economy expanded 0.3% month-on-month in January 2023, partially bouncing back from a 0.5% contraction in December when strikes halted business activities.

For February 2023, analysts expect the UK GDP to expand further by 0.2%.

Producer Price Index (PPI) | US (April 13)

Producer prices for final demand in the US fell 0.1% month-on-month in February 2023.

For March, analysts expect the US PPI to go up by 0.1%. 

Retail Sales | US (April 14)

Retail sales in the US were down 0.4% month-on-month in February 2023, following an upwardly revised 3.2% surge in January.

For March 2023, analysts expect US Retail Sales to contract by 0.4%.

Prelim University of Michigan Consumer Sentiment (April 14)

The University of Michigan revised the US consumer sentiment downwards to 62 in March 2023 from the preliminary figure of 67. This marks the first decrease in sentiment in four months, as consumers anticipate an upcoming recession.

For April 2023, analysts forecast the data to stand at 62.7.

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.