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Weekly Outlook: April 29 - May 3

4/29/2019, 4:14:53 PMBasics of Trading
Weekly Outlook: April 29 - May 3

This week is set to be a busy one for investors with a Federal Reserve rate decision, a U.S. jobs report and another round of U.S.-China trade talks on tap.

The Fed is expected to keep interest rates on hold at the outcome of its two-day meeting on Wednesday. At its March meeting the Fed indicated that it will hold off from hiking rates for the rest of the year amid expectations for a slower pace of economic growth.

The meeting is coming after Friday’s data showing that growth the U.S. economy unexpectedly accelerated in the first quarter. However, the expansion was boosted by gains in trade and inventories, which may unwind.

Elsewhere, the Bank of England also looks likely to leave monetary policy unchanged after its meeting on Thursday, as Brexit drags on.

Friday’s nonfarm payrolls report for April tops the list of data releases this week with economists expecting a gain of 181,000 jobs, while the unemployment rate is forecast to hold steady at 3.8%.

Other economic data on the docket the week include U.S. personal income and spending figures on Monday, as well as ISM manufacturing and non-manufacturing PMIs and a look at consumer confidence.

A new round of China-U.S. trade talks is due get under way in Beijing on Wednesday, with investors still awaiting some sign that the world’s two largest economies are getting close to a deal to end their almost 10-month long trade war.

The dollar eased against a basket of the other major currencies on Friday, as soft U.S. inflation data overshadowed strong first quarter growth figures, but still ended the week close to two year highs.

The U.S. dollar index, which measures the greenback against six other major currencies, was 0.13% lower at 97.787. The index, which hit a 23-month high earlier in the session, was up 0.6% for the week.

Recent U.S. data has been supportive of the greenback and reinforced the belief that the United States is on a firmer economic footing than other leading economies.

“There were plenty of positive headlines for the U.S. economy this week, with GDP growth accelerating in the first quarter, durable goods orders surging in March, and the S&P 500 hitting a record high,” Michael Pearce, senior U.S. economist at Capital Economics, said in a note.

“But signs of underlying weakness abound which, together with the renewed softness of core inflation, will keep the Fed sounding extremely dovish,” said Pearce.

The euro, which is hovering near its weakest level against the dollar since May 2017 amid worries about the strength of the euro zone economy, was up 0.22% at $1.1153.

The British pound, up 0.14% on Friday, ended the week down 0.57%, amid growing concern about stagnant Brexit talks.

Ahead of the coming week, has compiled a list of significant events likely to affect the markets.

Monday, April 29

EU consumer inflation expectations

US core price index (March)

US personal income and spending (March)

Tuesday, April 30

China manufacturing and non-manufacturing PMIs (April)

Eurozone prelim GDP (Q1)

Canada GDP (Q1)

Chicago PMI (April)

CB consumer confidence (April)

Pending home sales (March)

Wednesday, May 1

UK manufacturing PMI (April)

ADP nonfarm payrolls (April)

ISM manufacturing (April)

Federal Reserve rate decision and press conference

Thursday, May 2

China Caixin manufacturing PMI (April)

UK construction PMI (April)

Bank of England rate decision

Initial jobless claims

Factory orders (March)

Friday, May 3

UK services PMI (April)

Eurozone CPI flash estimate (April)

U.S. Nonfarm Payrolls (April) 

ISM non-manufacturing PMI (April)