This Global Week Ahead started with a foregone conclusion: Emmanuel Macron is the new French president. Imagine the sighs of relief. They must be heard across the European Union, and certainly within the formal office corridors of that institution.
However, it was a sell the news trading event.
Education! That key social variable showed itself as important again. It proved to be the strongest predictor of a vote for Macron. The higher the number of people with a university degree in an area, the stronger the percentage vote for Macron.
This pattern echoes the findings ofother Financial Times analysis. They looked into the predictors of the Leave vote in 2016 Brexit referendum,the 2016 U.S. presidential election and recentDutch elections. In each electoral instance, the less educated made up more of the right wing, anti-establishment voters.
Here is the rest of what happening to the globe this week.
Last week, the House voted to repeal Obamacareand replace it with the American Health Care Act. In the week ahead and beyond, the Congressional Budget Office (CBO) will assess the cost and coverage. This a reversal of the order usually undertaken. Also, independent effort in the Senate has begun towards a health care bill. The Senate version will be substantially different than the House bill. Then, the reconciliation fun begins. In short, dont expect this to be done for months and months.
There is a Bank of England (BoE) monetary policy meeting this week. Expect modest changes to the Bank of Englands key macro projections.While U.K. inflation is likely to reach or even exceed +3.0%, still, dont expect the BoE to hike. According to observers, the BoE will retain a bias to hike. But, the committee is not hurried to deliver, given the Brexit tremors.
This week coughs up a key data in Canadas loud housing debate about a bubble. Canada housing starts may be poised for some moderation after they hit the highest level in about five years in March and almost the highest in a decade. The Bank of Nova Scotia write about efforts to cool Ontarios and more specifically southern Ontarios including Torontos housing markets. Policy housing demand restraints may have been timed at the peak pace of demand -- and just as Canadas housing supply is rising to meet the challenges.
Over in Asia, Chinas CPI inflation rate probably is likely to track at +1.0% y/y in April. Their Inflation rate looks very soft on the consumer side. On top of that, mainland Chinese producer price inflation is likely to fall toward zero -- and possibly lower over the second half of 2017. That is a weak level of inflation.
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Key Global Macro
Ho hum. Back to macro data after an exciting French election last week!
German factory orders, industrial production and trade for March will lead up to Q1 German GDP growth. The latter is out on Friday. French trade, industrial production and Q1 nonfarm payrolls also come out.
In top of that, we will tap into U.K. industrial output and trade figures, Italian retail sales and industrial output.
The Eurozone sum of its member countries on industrial output will also be made available.
Eight U.S. Fed voting members will be speaking 10 times, all over the country and in India this week.
On Monday, Canadas housing starts came in at 214K, below the 220K number expected. Note: There is a housing bubble going on in some urban areas up there.
The Feds Bullard speaks in Florida and Mester speaks in Chicago.
On Tuesday, German industrial production should be growing +2.5% y/y.
The U.S. NFIB Small Business Optimism index comes out. It has been spiking up.
The forecast is for 103.5 from 104.7 in a prior reading.
The bi-week core CPI in Mexico should be +5.71% from 5.35% y/y. Thats a concern.
The Feds Kashkari speaks in Minneapolis, Rosengren in NY, and Kaplan in Dallas.
On Wednesday, same store retail sales in Mexico are holding up at 3.2% y/y.
Industrial Production in France could be down -0.5% y/y, whereas in Italy, it is up +1.9% y/y. Lets hope the new French President can change sentiment there.
Mario Draghi speaks to the Dutch Parliament, and in Frankfurt.
Industrial production in the U.K. is strong, at +2.8% y/y.
The unemployment rate in Greece is now 23.5%. Its a big problem.
On Thursday, interestingly, the Feds Dudley speaks in Mumbai, India
The BoE Monetary Policy Committee meets and issues a rate decision. 0.25% is the base rate, and it is not forecast to change.
U.S. initial claims for the week come out.
On Friday, the core German inflation rate, the HICP (harmonized index of consumer price inflation) comes out. The prior reading was +2.0% y/y. In Spain, it is +2.6% y/y. The tack above the 2 percent target in Spain is worth noting.
University of Michigan sentiment comes out. The prior was 97.
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The European Union Got Stronger: Global Week Ahead - Zacks.com