Before we look at the main events of this week, a quick recap of this weekend's highlight: OPEC+ "unexpected", or rather expected by some...
... decision to cut output starting in May that will exceed 1 million barrels a day. Russia agreed to keep production at their current reduced level, while Saudi Arabia will see the largest cuts, slowing production by 500k barrels a day. The White House naturally came out strongly against the move, due to concerns with consumer prices and the inflationary effects of higher fuel costs. It will take some time to see exactly how much this impacts global prices as demand concerns linger, but as DB's Jim Reid notes, this is another potential factor exerting upward pressure on inflation after largely being an ameliorating factors this year. As we will show shortly, oil prices fell every month for the last quarter, leading to the worst Q1 performance since 2020 when global shutdowns throttled demand. Brent crude futures are starting this quarter up +5.60% to $84.24/bbl, with WTI futures up +5.58% to $79.89/bbl after both initially were more than 8% higher at the start of trading.
So looking ahead to this week, the US jobs report on Friday (when the US and most global markets will be closed for Good Friday) should be the main focus. It will be the last jobs numbers before the next Fed meeting on May 3rd and markets will be looking for signs of cooling in the labor market after 475bps of tightening from the Fed over the last year. The report follows recent strong nonfarm payrolls beats, hotter-than-expected inflation data, and a 25bps Fed hike despite US regional bank concerns. Economists expect nonfarm payrolls to gain +240k (vs +311k in February) and the unemployment rate to remain unchanged (3.6%), while expecting hourly earnings growth to rise modestly to 0.3% from +0.2%. Prior to the Friday's report, JOLTS (Tuesday) and ADP (Wednesday) data will also be in focus.
Today we will get a sense of how global growth evolved over the course of the month with the release of US ISM manufacturing data later on, followed by services on Wednesday. Coupled with the jobs report, whether the ISM indices also show robust growth, especially in components like employment and prices, will be key to assess economy's resilience. Still, factors like the recent banking turmoil may not yet feed through to major economic indicators. DB's US economists see both gauges declining from February levels (manufacturing 47.1 vs 47.7 and services 54.4 vs 55.1).
In Europe, the key data releases include trade balance (Tuesday), factory orders (Wednesday) and industrial production (Thursday) for Germany, industrial production (Wednesday) and trade balance (Friday) in France as well as retail sales and PMIs for Italy. Our European economists overview what the latest prints on those indicators, among others, say about the European economy here, providing context for this week's readings. Going forward, they underscore the recent banking stress as a new headwind and see risks as being tilted to the downside.
The major data points out of Asia include the China Caixin PMI data and Japan Tankan indices which we highlight below along with Japanese labour cash earnings and household spending on Friday. Friday's data are expected to show total cash earnings per worker at 0.9% YoY, up from January's 0.8%, and real household spending down -0.2% MoM vs 2.7% in January.
Courtesy of DB, here is a aay-by-day calendar of daily events
Monday April 3
Tuesday April 4
Wednesday April 5
Thursday April 6
Friday April 7
Finally, looking at just the US, Goldman notes that the key economic data releases this week are the ISM manufacturing report on Monday, JOLTS job openings on Tuesday, and the employment situation report on Friday. There are several speaking engagements from Fed officials, including Governor Cook and presidents Mester and Bullard.
Monday, April 3
Tuesday, April 4
Wednesday, April 5
Thursday, April 6
Friday, April 7
Source: Deutsche Bank, Goldman, BofA