AUSTRALIAN DIARY: Everything you need to know about the week ahead for markets

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Global markets adopted a more cautious tone to end the week as US stocks traded flat.

The tech sector got a boost from Amazon shares, which climbed by 3.6% to a new record high after another big earnings beat.

US 10-year bond yields edged back further below 3% and there was a relatively muted market reaction to another positive US data surprise, as Q1 GDP figures beat expectations.

But UK GDP growth came in at just 0.1% for the quarter — the slowest rate in five years.

And that drove a sharp selloff in the pound, as markets reassessed the likelihood of an interest rate rise next month by the Bank of England.

After climbing steadily throughout the week, the US dollar index had a mixed session on Friday night.

And the AUD found some buyers, as it posted gains across the board to close the week at 0.7581 US cents.

This week in Australia, the RBA will hold its monthly interest rates meeting on Tuesday and present its quarterly economic outlook in Friday.

Looking abroad it’s a busy week ahead in the US with a rates announcement by the US Fed along with key data on inflation and employment.

Australia

Tuesday’s interest rate announcement (2:30pm AEDT) is unlikely to bring any surprises from the RBA, with official interest rates almost certain to stay on hold at 1.5%.

The rates announcement will be followed by a speech from RBA Governor Philip Lowe on Tuesday night, at the central bank’s board dinner in Adelaide.

Then on Friday, the RBA will present its quarterly Statement on Monetary Policy (SoMP), which will include its latest economic forecasts.

ANZ’s currency strategists don’t expect either event to spark a sharp move in the AUD.

“We expect fairly minimal changes to the RBA’s economic forecasts, confirming that its policy outlook is unchanged,” ANZ said.

“That is: on hold with the expectation that the next move in the cash rate will be up, but with uncertainty around the timing of the first hike.”

Also this week there’s the Ai Group’s manufacturing PMI figures for April (Tuesday). And on Thursday, the ABS will release March data on international trade and building approvals.

International

Key data in the US kicks off on Monday night with the release of personal income & expenditure data, which includes the reading for PCE inflation.

Annual core inflation is expected to reach 2%, which would bring it into the US Fed’s target range of 2-3%.

However, the annual figure is likely to get a boost from a low base comparison in the previous year. Monthly PCE inflation growth is forecast at a more moderate 0.2%.

Then there’s the US Fed’s monthly interest rate announcement on Wednesday night, with no change expected to current policy settings.

And on Friday after markets close in Asia, there’s all-important US employment data.

The current market forecast is for 190,000 jobs to be added in April, with America’s jobs market expected to bounce back after a weaker result in March.

Elsewhere, there’s manufacturing & services PMI data throughout the week as a new month gets underway, starting with China PMIs on Monday.

And across the Tasman, New Zealand will report Q1 employment data on Wednesday.

Then on Wednesday night, Europe has a preliminary reading for Q1 GDP followed by inflation data on Thursday night.

With European data missing to the downside lately, both data points will give an update the strength of Europe’s economy and the outlook for monetary policy.

Have a great week.

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