Weekly Forecast – April 24
International political trends will continue to have an important impact during the week with a focus on the French Presidential election run-off while markets will also be looking at tax proposals from President Trump which are due to be released in the week ahead.
The latest US consumer confidence data will be released on Tuesday with durable goods and jobless claims data on Thursday. In terms of market reaction, the latest GDP data on Friday is likely to be the most important release.
US tax policies will be important with President Trump pledging to announce details, possibly on Wednesday, of reform to the tax system and tax cuts for both companies and individuals.
Markets will be looking very closely at whether a border-adjustment tax is proposed by Trump. The congressional response will also be an important factor.
The initial reading of first-quarter GDP will be released on Friday, although the impact is likely to be limited.
The Bank of England monetary policy decision is due the following week, but central bank officials will have very limited scope to make any comments during the election campaign and there should be no significant rhetoric from MPC members.
Political developments will inevitably be watched closely as the election campaign continues, although the impact is likely to be limited unless there is a major shift in opinion polls.
Euro-zone developments will be an extremely important focus during the week ahead.
As far as economic data is concerned, the preliminary consumer inflation data is due for release on Friday.
The latest ECB interest rate decision will be announced on Thursday with bank President Draghi also holding his regular press conference. The evidence suggests the ECB will be looking to avoid any significant shift in market expectations, but Draghi’s comments will be important.
The French Presidential election will also be a key focus following the first-round result. The initial opinion polls for the second round will be monitored closely with markets then looking to assess whether either candidate can gain any momentum for the run-off vote.
Geo-political issues will remain important with particular concerns surrounding the situation in North Korea. Any further missile tests would trigger a spike in risk aversion.
The Bank of Japan will announce its latest policy decision on Thursday with no change in policy expected by the central bank.
Australia will announce its latest inflation data which will have significant implications for the May interest rate decision.
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