The week ahead: 29 April – 3 May 2024

Eurozone – Flash headline HICP is expected to hold steady, as pass-through from higher oil prices is offset by lower household energy bills, while the core HICP is expected to edge down slightly as the upward impact from the earlier timing of Easter on services inflation unwinds. Big picture, the data is expected to show that disinflation is on track. GDP is expected to have recovered slightly in Q1, helped by a bottoming out in industry and the mild winter, which has boosted construction activity over the quarter. However, private consumption looks to have been weighed by weak spending on goods, partly offset strength in services.

US – The Fed is expected to keep policy on hold, and Chair Powell is likely to sound hawkish in response to recent firm inflation data – essentially endorsing current market pricing for a later start to rate cuts. The Fed may also announce a slowing in its balance sheet runoff (QT) at this meeting. Non-farm payrolls are expected to remain solid, but to slow from recent elevated levels, with the unemployment rate expected to hold steady. Wage growth is also likely to continue holding at relatively benign levels.

The Netherlands – Sticky services prices keep Dutch CPI above target for the foreseeable future. We expect CPI inflation to come out at 2.6% yoy in April (March (+3.1% yoy)

China – After a sharp improvement last Month, official PMIs for April are generally expected to come down somewhat again, but to stay in expansion territory. This retreat partly reflects holiday-related distortions, although March activity data published earlier this month had already pointed to a recent slowing in growth momentum.