On Tuesday, Japan will release the BoJ Core CPI y/y, while in the U.S., we will get the durable goods orders m/m and CB consumer confidence.
Thursday, many countries will observe Ascension Day, leading to lighter market activity. In the U.S., we’ll get the release of preliminary GDP q/q and unemployment claims.
The consensus for U.S. durable goods orders m/m is -7.9% vs. the prior 7.5%, and for core durable goods orders m/m, -0.1% vs. the prior -0.4%.
This month, expectations point to weakness in headline orders, which can be attributed to high borrowing costs and uncertainty related to trade policy.
Recently, consumer confidence has declined to levels approaching those seen during the pandemic, reflecting growing concerns about the economic outlook. However, a rebound is expected in this week’s data, likely driven by temporary relief following the 90-day pause on elevated tariffs targeting China.
April marks the first month of the quarter and primarily captures quarterly price changes in goods such as clothing, furniture, and home maintenance. More comprehensive data on prices for services will be available in the coming months.
Looking ahead, the RBNZ is expected to adopt a data-dependent approach, with the possibility of pausing rate cuts in July depending on economic conditions, according to Westpac.
The consensus for the Tokyo core CPI y/y is 3.5% vs. the prior 3.4%. Japan is expected to experience persistent inflationary pressure alongside a slowdown in manufacturing activity, which can be attributed to U.S. tariffs.
In the U.S., the consensus for the core PCE price index m/m is 0.1% vs. the prior 0.0%; for personal income m/m, it is 0.3% vs. the prior 0.5%; and for personal spending m/m, 0.2% vs. the prior 0.7%.
Beyond autos, spending on services also gained momentum. Increases were seen in both necessary expenses like healthcare and more optional categories such as travel and dining, indicating that, despite concerns around inflation and falling consumer confidence, demand for leisure and service-related spending remains relatively resilient.
In Canada, the consensus for GDP m/m is 0.2%, compared to the prior -0.2%. Canada’s GDP is expected to have grown at an annualized rate of 1.8% in the first quarter, driven primarily by a strong performance in January.
Household consumption is expected to have increased in Q1, although slower home resale activity likely curbed residential investment. Business investment may have edged higher, but the outlook remains clouded by ongoing trade policy disruptions that could dampen future capital spending.
Still, retail spending has held up well despite declining consumer sentiment, helped by strong cardholder activity and a relatively stable perception of current business conditions. Canada continues to benefit from the lowest U.S. tariff exposure among major trading partners, following exemptions granted in April. Meanwhile, job postings data from early May suggest that some stability is returning to the labor market.
While overall economic momentum is expected to cool this year, a contraction remains unlikely as domestic demand helps cushion the impact of external trade headwinds.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
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