Market movers ahead
- In the US, the key event of next week is Friday’s labour market report. We forecast it will show a total of 160,000 new jobs, an unchanged unemployment rate of 4.7% and monthly wage growth of 0.2% m/m. The week also brings ISM manufacturing for March and a number of speeches by FOMC members.
- In the euro area, ECB minutes will be scrutinised by markets for clues on whether a rate hike before QE termination is on the cards. We do not think so. The week also brings the monthly labour markets report, retails sales and German factory orders.
- In the UK, PM Theresa May triggered Article 50 this week, meaning Brexit negotiations have officially started and we are likely to begin to get more headlines about what to expect of the negotiations in coming weeks and months. For more information on what happens next, see Brexit Monitor No. 27: Brexit negotiations set to start today – what now? 29 March. The week also brings PMIs and the NIESR GDP estimate.
- In China, focus is on Caixin manufacturing PMI on Monday. The official PMI manufacturing on Friday surprised a bit on the upside and pointed to continued strong growth in March. We look for a rise to 52.0, from 51.7 in February.
- In the Scandi area, the key releases are currency reserve data from Danmarks Nationalbank and industrial production releases for Norway, Sweden and Denmark.
Global macro and market themes
- The EU favours a multi-speed Europe – progress will depend on upcoming elections.
- Italy is the big worry – expect the EU to get tougher on its debt and banking problems.
- Greece has become a political issue between the EU and the IMF but do not expect a summer-2015 scenario.
- In our view, the ECB is unlikely to raise rates before late 2018 at the earliest.