Economic data to watch this week

In the U.S. this week, all eyes are on the Fed, which makes its next rate announcement on Wednesday.

The odds of the Fed holding firm are currently at 93%, according to CME Group’s FedWatch Tool. It’s a view that hasn’t been challenged by recent public appearances by Federal Open Market Committee (FOMC) voting members.

“In this context, we see no reason for the Fed to raise rates this week,” says a weekly report from National Bank. “With five more meetings scheduled until the end of 2018, of which three will be followed by press conferences, the FOMC will have all the elbow room needed to proceed with two or three more hikes without being a source of market disruption.”

Another key U.S. economic release this week is April’s employment data, on Friday.

“Based on the extremely low rate of layoffs—jobless claims touched a 50-year low at the end of April—net employment creation may have rebounded to 160K following March’s lacklustre +103K print,” says National Bank, though that forecast is lower than Q1’s monthly average of just over 200K in job gains.

In a weekly report, CIBC says a slightly cooler gain in jobs than that average shouldn’t change the mostly positive outlook for household incomes and consumer spending.

For example, “Should business investment start to pick up again later in the year following the tax cut and other incentives given to companies to make such investments, that should re-strengthen the trend in construction and manufacturing employment growth,” says the bank.

This is also the last big week of U.S. earnings season, with 144 firms reporting from the S&P 500, including Berkshire Hathaway.

Canadian and global data

In Canada, look for February GDP numbers Tuesday. National Bank expects positive contributions from manufacturing, residential construction, retail and the energy sector.

“All told, we’re expecting GDP to have expanded 0.2% in the month following a weak -0.1% print in January,” says the bank.

CIBC expects a 0.3% GDP reading, which would leave the economy tracking 1.7% for Q1, matching the rate seen in the fourth quarter of last year.

“That leaves some elbow room for the Bank of Canada to leave rates unchanged at its May meeting, using that time to monitor the myriad of headwinds facing the economy,” says CIBC.

Canada’s earnings season is in high gear this week with 67 TSX-listed firms set to release, including Manulife and Great-West Life, notes a weekly report from Scotiabank.

For the eurozone, economic reports will be released for first quarter GDP, April CPI and March retail sales and unemployment. China will have April’s manufacturing PMI.

For more analysis, read the full reports from National Bank, CIBC and Scotiabank.