Weekly Outlook: Apr 2 – Apr 6; US Jobs Report Takes Center Stage. RBA Policy Meeting, Eurozone CPIs, and Canada’s Employment Data in Focus as Well.

After a relatively light week in terms of data releases, the calendar gets heavier this week. The spotlight is likely to fall on the US employment data, where wages may steal the show once again. On Tuesday, the RBA is expected to keep interest rates unchanged. We don’t expect major changes in language either. Eurozone’s preliminary CPIs and Canada’s Jobs report could attract attention as well.
On Monday, markets in most G10 nations will remain closed in celebration of Easter Monday.
From Japan, we got the Tankan survey for Q1. Expectations were for the large manufacturers’ index to have held steady to the 11-year high of 25, but actually it came out lower than expected at 24. The large non-manufacturers’ one was forecasted to rise to 24 from 23 in Q4 2017, but it also came out lower than expected at 23. Although the better numbers could have confirmed further improvement in business conditions, we doubt that it would tempt BoJ policymakers to alter their ultra-loose policy anytime soon.
Although both the national headline and core inflation rates ticked up in February, the more forward-looking Tokyo CPIs for March revealed a slowdown in both headline and core terms. Also, the Bank’s own core metric stood at +0.8% yoy in February, which is well below the Banks objective of 2%. What’s more, the recent appreciation of the Japanese yen could threaten Japan’s competitiveness by hampering exports and could also weigh on inflation through falling import prices. As such, we maintain the view that policymakers have still a long way to go before they start thinking about removing accommodation.

Read the full financial markets weekly outlook on JFD Research.

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