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What to Watch - Week of 22 April 2024

Q1 CPI for Australia (Wednesday) headlines in what is a holiday shortened week given the ANZAC Day Public Holiday (Thursday). We expect Trimmed Mean inflation to print at 0.9% q/q and 3.8% y/y (consensus 0.9/3.9)

What to Watch - Week of 22 April 2024

Past Week

  • Strong US retail sales and the Fed’s Powell acknowledging a ‘lack of further progress on inflation’ supported Fed cut repricing
  • There are 44bp of cuts priced by end 2024, little changed over the week
  • Local data showed the unemployment rate holding onto most of February’s fall, but weaker Asian FX, risk sensitivity, and the stronger for longer USD were in the driving seat.
  • Concerns about further escalation in the middle east sends AUD briefly below 64c to a new YTD low today before partly recovering

Comment

  • We compare recent inflation outcomes in the US, Australia and the Euro area. Adjusting for the treatment of housing shows divergent themes
  • US inflation on a HICP basis has flatlined around 2.5% on a 6m annualised basis. Earlier progress was material, but it has stalled.
  • Australian inflation has lagged progress elsewhere, but gradual progress looks set to continue while policy remains modestly restrictive.

Week ahead

  • Q1 CPI for Australia (Wednesday) headlines in what is a holiday shortened week given the ANZAC Day Public Holiday (Thursday). We expect Trimmed Mean inflation to print at 0.9% q/q and 3.8% y/y (consensus 0.9/3.9)
  • US Q1 GDP (Thursday) headlines where the Atlanta Fed GDP Nowcast gives another well above trend read of 2.9% quarterly annualised. Also important will be Core PCE (Friday) with consensus at 0.3% m/m
  • Elsewhere the PMIs in both Asia and Europe (Tuesday) will garner attention for whether the pickup in activity (particularly manufacturing) continues. Note this pick up off the lows is occurring even before rates are cut
  • BoJ (Friday) seen on hold with officials evaluating the impact of a weaker yen on their growth and inflation forecasts
  • Other data: China Loan Prime Rates (Monday), German IFO (Wednesday), and BoC Minutes (Wednesday). Earnings also continues with key tech: Tesla (Tuesday), IBM & Meta (Wednesday), Microsoft & Alphabet (Thursday)
View the full report here

Important Events Preview

Australia Q1 CPI | NZ Trade | US Q1 GDP, PCE | CH Loan Prime Rate | EZ/UK PMIs | JN BoJ, Tokyo CPI | CA BoC Minutes

Also in the What to Watch

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All prices and analysis at 18 April 2024.  This information has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 ("NAB").

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About the Author
NAB Markets Research

Our markets team is keeping clients informed with award-winning in-depth analysis on the Australian economy, foreign currency, fixed income, credit and commodities markets.