Investors brace for insights into world economy

By BLOOMBERG

LONDON • The world economy’s ability to rebound from its recent soft patch will be tested anew this week as data is released from Washington to Beijing.

US Federal Reserve (Fed) officials concluded a meeting last Wednesday amid expectations they won’t change their monetary policy settings as counterparts elsewhere follow its dovish turn. A press conference by chairman Jerome Powell will be eyed for insights into his view of the policy outlook as well as what he’s thinking about his inflation target and bond portfolio.

“While the Fed is not expected to take any policy action at its May 1 meeting, there will be plenty of action behind the scenes,” said Carl Riccadonna, chief US economist at Bloomberg Economics.

Perhaps as interesting will be a flood of data in the aftermath of last week’s news that US economic growth accelerated markedly in the first quarter (1Q), albeit driven by advances in trade and inventories, which may reverse. The high point will be Friday’s release of the US jobs report for April, with a gain of 180,000 expected by the consensus of economists surveyed by Bloomberg News. A survey of manufacturers on Wednesday is also expected to show some signs of stabilising.

Elsewhere, China releases its Purchasing Managers Index (PMI) tomorrow, the same day that the euro-area is predicted to show its economy steadied in the 1Q.

Here’s our weekly rundown of key economic events:

US and Canada
Other major data due include the US report on personal income and spending today, which is forecast to show spending outpacing income.

On Wednesday, the Treasury will reveal its latest plan to keep selling debt to plug a record budget deficit.

The US and China will resume trade talks in Beijing amid hopes a deal is imminent. Canada will reveal tomor row how its economy performed during the 1Q.

Europe, Middle East and Africa
France and Italy will release output data tomorrow which, along with the euro-area number, will help provide a more definitive picture of the 1Q, when the European Central Bank became alarmed enough about the slowdown to reactivate its stimulus stance.

The modest acceleration seen by economists might provide a basis for policymakers to conclude the current soft patch has stabilised. The Bank of England is set to leave monetary policy unchanged on Thursday, although there is some suggestion it may become more hawkish. The same day, the Czech Republic may hike its benchmark to 2%. Turkey’s central bank is due to shed light on billions of dollars of foreign-currency holdings that analysts have been struggling to keep track of this year.

Asia
China’s PMI reports will be closely watched tomorrow, with economists expecting a further improvement in the factory gauge in April. That would reinforce economists’ recent bet that the worst may be behind the world’s second-biggest economy and that stimulus efforts may be dialled back a notch.

Meantime, the next round of China- US trade talks will get under way in Beijing. While analysts have begun to bake in expectations for some form of agreement, global investors are still awaiting a date for President Donald Trump and President Xi Jinping to sign an accord.

Latin America
Mexico’s 1Q GDP, due tomorrow, will show just how much Latin America’s second-largest economy slowed in the beginning of President Andres Manuel Lopez Obrador’s administration.

Also tomorrow, Argentina’s economic activity may record a slight improvement in February, before slumping again in March as leading indicators suggest.

Meanwhile, in Brazil, investors will focus on how much progress President Jair Bolsonaro’s pension overhaul proposal makes in Congress — last week the bill passed the first of seven votes it will have to face before being signed into law. — Bloomberg