This week’s central bank events and major news reports still not enough for you? Here are three more major economic events that could induce volatility next week. You have been warned!
1. Manufacturing and Services PMIs
The week will kick off with China’s HSBC manufacturing PMI at 1:45 am GMT. The report is expected to inch higher to a 48.7 reading for the month of March after hitting a 7-month low at 48.5 in February. This will be the first report that won’t cover the Chinese Lunar Year Festival, so investors will pay attention to see if concerns over a slowdown in Chinese factories have merit.
Flash manufacturing and services PMIs from France, Germany, and the euro zone will also be released on Monday, this time at 8:00 – 9:00 am GMT. On their own these reports don’t usually influence the euro’s price action for long. However, they could pack a punch if they all hint at industry strength or weakness. Only France’s numbers are below the expansionary 50.0 reading but keep an eye out in case there are significant surprises from Germany or the euro zone.
2. U.K. Data Dump
On Tuesday at 9:30 am GMT we’re expected to see the U.K.’s inflation numbers. If you recall, the latest MPC meeting minutes reflected that the members aren’t expecting consumer prices to rise by more than 2.5% for the next 18 to 24 months.
The consumer spending theme will continue on Thursday with the retail sales data scheduled at 9:30 am GMT. Last month’s data showed a surprising 1.5% drop for January and a downward revision for December’s figures. Fortunately, it had minimal impact on the pound. But will the weakness continue on through March?
The last but definitely not the least major report on tap from the U.K. is the quarterly current account balance. The report printed a 20.7 billion GBP current account deficit in the three months to September, its highest since 1989. This led to some BOE members remarking on the possibility of more pound weakness if the current account deficit continues to balloon to epic proportions.
3. G7 Meetings
Next week also marks the beginning of a new G7 meeting. For newbies out there, the Group of 7 consists of Canada, France, Germany, Italy, Japan, the U.K., and the U.S. Although the meetings are closed to the public, some officials give statements to reporters and an official statement is released at the end of the meeting.
One reason why the meeting will be closely watched is the possibility that a Finance Minister or two will attempt to jawbone the currency. Another more important reason is that the G7 leaders are making it their business to discuss Russia’s latest moves on Ukraine.
If the leaders decide on heavier sanctions against Russia for its moves this week, then we might see another leg of risk aversion across the board. On the other hand, softer-than-expected sanctions could inspire a mild profit-taking if not an outright risk rally in the markets.