Share This Story
ECONOMIC DATA ANALYSIS - US FOMC MINUTES & CHINESE TRADE TOP QUIET WEEK FOR DATA
ANALYSIS FRIDAY 4 APRIL 2014
FOMC MINUTES & CHINESE TRADE TOP QUIET WEEK FOR DATA
• FOMC minutes
watched for a clearer steer on Fed outlook
• MPC on hold, but
policy debate becoming more nuanced
• China trade
balance to bounce back into surplus, but factory gate inflation to fall further
The economic calendar is relatively light over the coming week,
with market sentiment likely to remain coloured by March’s mixed US employment
report. Although the headline payroll gain was slightly softer than expected,
upward revisions to January and February suggest the US economy was not as weak
in early Q1 as previously thought. Having posted their sharpest quarterly
decline in three years in Q1, US 10-yr Treasury yields have moved off their
lows over the past week, pulling other bond yields up in their wake.
FOMC minutes... With the coming week’s
US data calendar centred around jobless claims, Michigan consumer confidence
and the PPI, we doubt the US recovery debate will be advanced much one way or
the other. Instead, the focus is likely to be on the monetary policy
outlook. Following the confusion sparked by Fed Chair Yellen’s post-FOMC
press conference, and her subsequent more dovish remarks last Tuesday,
investors will be looking for clarification from the March FOMC minutes that
the Fed is committed to keeping policy extremely accommodative. Fed members,
including Tarullo, Kocherlakota and Plosser, are also due to speak.
Emerging signs of dissent?... In the UK, the MPC
meets on Wednesday. Due to international commitments, the meeting has been
shortened to one day, although the policy announcement will still be made at
noon on Thursday. With the unemployment rate still above the 7% forward guidance
threshold, and inflation below the government’s 2% target, policy looks almost
certain to be left on hold. With no statement expected, markets will have to
await the publication of the minutes in two weeks’ time for an update on how
the policy debate is evolving.
UK IP and trade watched for Q1 GDP
Data wise, the UK calendar is also fairly light, with main attention on the
February industrial production and external trade figures. Both will help
inform judgements about the strength of Q1 GDP. We look for industrial
production to have risen by 0.4%, boosted by a bounce-back in extraction output
after the prior month’s fall. The visible trade deficit, however, is forecast
to have remained at £9.8bn, reflecting a deterioration in EU trade.
data trumped by inflation concerns... Industrial production
data are also due in Germany, France, Italy and Spain. Here too, we expect to
see further signs of improvement, led by Germany. While these figures
will be watched for what they reveal about Q1 growth prospects the main focus
in the euro area at the moment is on inflation. With ECB President Draghi
strongly hinting at this week’s press conference that the ECB stands ready to
act if euro wide inflation remains weak, the upcoming French and final German
CPI figures for March may attract more interest than usual.
China data watched for signs of weakness...The focus will also be
on China, where key external trade and inflation data are due. In February,
China’s trade balance plummeted to a deficit of $23bn, with exports posting
their biggest annual drop since 2009. While the decline was exacerbated by the
disruption caused by the Chinese New Year, and by the inflated export bill last
year due to false invoicing, it has added to concerns over China’s growth
prospects. While we expect China’s exports to have rebounded last month, the
underlying trend is slowing. Similarly, we expect China’s annual CPI to
jump to 2.4% in March from 2.0% in February. The pickup, however, is
expected to reflect base effects rather than underlying inflation pressure.
More revealing, perhaps, the March PPI is forecast to post its 29th consecutive
This document, its
contents and any related communication (altogether, the 'Communication') does
not constitute or form part of any offer to sell or an invitation to subscribe
for, hold or purchase any securities or any other investment. This
Communication shall not form the basis of or be relied on in connection with
any contract or commitment whatsoever. This Communication is not intended to
form, and should not form, the basis of any investment decision. This Communication
is not and should not be treated as investment research, a research
recommendation, an opinion or advice. Recipients should conduct their own
independent enquiries and obtain their own professional legal, regulatory, tax
or accounting advice as appropriate. Any transaction which a recipient of this
Communication may subsequently enter into may only be on the basis of such
enquiries and advice, and that recipient’s own knowledge and experience. This
Communication has been prepared by, and is subject to the copyright of, Lloyds.
This Communication may not, in whole or in part, be reproduced, transmitted,
stored in a retrieval system or translated in any other language in any form,
by any means without the prior written consent of Lloyds. This Communication is
provided for information purposes only, and is confidential and may not be
referred to, disclosed, reproduced or redistributed, in whole or in part, to
any other person. This Communication is based on current public information.
Whilst Lloyds TSB ank plc (“Lloyds TSB”) and
Bank of Scotland plc ("Bank of Scotland") have exercised reasonable
care in preparing this material and any views or information expressed or
presented are based on sources it believes to be accurate and reliable, no
representation or warranty, express or implied, is made as to the accuracy,
reliability or completeness of the facts and data contained herein.
This material has
been prepared for information purposes only and Lloyds TSB, Bank of Scotland,
their directors, officers and employees are not responsible for any
consequences arising from any reliance upon such information. Under no
circumstances should this material be treated as an offer or solicitation to
offer, to buy or sell any product or enter into any transaction. If you receive
information from us which is inconsistent with other information which you have
received from us, you should refer this to your Lloyds TSB or Bank of Scotland
Relationship Manager for clarification.
Lloyds Bank Corporate
Markets, Lloyds TSB Corporate Markets and Lloyds TSB are trading names of
Lloyds TSB Bank plc, Lloyds TSB Scotland plc and Bank of Scotland plc. Lloyds
TSB Bank plc. Registered Office: 25
Gresham Street, London EC2V 7HN. Registered in England and Wales no. 2065.
Lloyds TSB Scotland plc. Registered Office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH.
Registered in Scotland
no. 95237. Bank of Scotland plc. Registered Office: The Mound, Edinburgh EH1 1YZ. Registered in Scotland no.
SC32700. Authorised and regulated by the Financial Services Authority under
registration numbers 119278, 191240 and 169628 respectively.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."