Investors brace for a big week of insights into world economy

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New Delhi | Published: April 28, 2019 12:14:43 PM

The high point will be Friday’s release of the U.S. 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 stabilizing.

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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.

Federal Reserve officials conclude a meeting on 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 U.S. economist at Bloomberg Economics.

Perhaps as interesting will be a flood of data in the aftermath of last week’s news that U.S economic growth accelerated markedly in the first quarter, albeit driven by advances in trade and inventories, which may reverse. The high point will be Friday’s release of the U.S. 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 stabilizing.

Elsewhere, China releases its purchasing managers index on Tuesday, the same day that the euro-area is predicted to show its economy steadied in the first quarter.

Here’s our weekly rundown of key economic events:

U.S. and Canada
Other major data due include the U.S. report on personal income and spending on Monday, 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 U.S. and China will resume trade talks in Beijing amid hopes a deal is imminent. Canada will reveal on Tuesday how its economy performed during the first quarter.

EUROPE, MIDDLE EAST and AFRICA
France and Italy release output data on Tuesday which, along with the euro-area number, will help provide a more definitive picture of the first quarter, 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 policy makers to conclude the current soft patch has stabilized. 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 percent. 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 on Tuesday, 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 dialed back a notch. Meantime, the next round of China-U.S. 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 first-quarter gross domestic product, due on Tuesday, will show just how much Latin America’s second-largest economy slowed in the beginning of President Andres Manuel Lopez Obrador’s administration. Also on Tuesday, 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.

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