Greece’s ongoing political upheaval, European growth figures and a series of key data releases in the United States, Japan, Brazil and South Africa will keep markets on their toes this week. Here are the highlights.
North America
On Tuesday, US consumer inflation and retail sales figures will take centre stage. Economists expect April’s consumer price index to have remained unchanged last month.
Analysts surveyed by Dow Jones expect retail sales to have ticked up 0.1% last month, after 0.8% growth in March. Retail spending accounts for roughly one-third of all activity in the world’s largest economy, so investors pay close attention to these figures.
On Wednesday, attention will shift to America’s housing and industrial production statistics. Housing starts are projected to have increased from an annualised rate of 654 000 units in March to 685 000 last month. Industrial production is expected to have risen 0.6% last month after flat readings in the two previous months.
Thursday will bring jobless benefit claims data and the Philadelphia Federal Reserve’s manufacturing survey, a closely followed gauge of trends in the manufacturing sector. Markets expect jobless claims to have fallen to 365 000 last week. The Philadelphia federal reserve bank’s general business conditions index is expected to register a slight improvement.
To the US’s north, Canada will release manufacturing sales data on Monday, wholesale figures on Thursday and inflation data on Friday.
To the south, Mexico will issue industrial production numbers on Monday, inflation data on Wednesday and gross domestic product (GDP) figures on Friday.
On the corporate calendar, next week’s most eagerly anticipated event is Facebook’s initial public offering (IPO), currently scheduled for Friday. Markets expect the social media behemoth’s listing to be the largest tech IPO in history, easily surpassing German company Infineon’s $5.9-billion record set in 2000.
Europe
Greece’s President Karolos Papoulias will meet with the country’s political leaders this evening in a last ditch attempt to convince them to form a government. After talks with the major parties failed over the weekend, few hold out hope for his success.
If leaders fail to reach agreement, Papoulias must call a new election. With anti-austerity parties well in the lead in recent polls, a second election could put Greece one step closer to insolvency and, quite possibly, out of the eurozone.
Beyond Greece, global markets are also likely to focus on an Italian debt auction on Monday, the first bond sale in a peripheral eurozone country since last week’s elections in France and Greece. Italy will offer up to €5.25-billion in bonds. Analysts are concerned that Europe’s shift away from austerity toward growth may pressure Italian and Spanish bond yields further.
On Tuesday, eurozone GDP figures are expected to show that the currency bloc is now officially in recession. Belgium, Cyprus, the Czech Republic, Denmark, Greece, Ireland, Italy, the Netherlands, Portugal, Slovenia, Spain and the United Kingdom are already in recession — defined as at least two consecutive quarters of negative growth.
In addition to Tuesday’s eurozone figures, investors will be scrutinising individual releases for Germany and France, the continent’s two largest economies. Economists are expecting Germany to have eked out 0.1% growth. France is predicted to show no growth.
Asia
Japan is likely to dominate Asian economic news week as the world’s third largest economy reports key data.
On Monday, the bank of Japan will release April’s corporate goods price index (CGPI), a measure of producer price changes. Economists surveyed by Market News International expect the index to have declined 0.3% in April, after rising by 0.6% in both February and March.
On Tuesday, Japan’s closely watched consumer confidence index is expected to show an uptick to 40.8 in April from 40.3 in March, its highest level since February of last year.
On Wednesday, Japan’s Cabinet office will release March and first quarter machinery orders data, a leading indicator of private capital spending. Analysts expect a year-on-year fall in core orders — which excludes volatile utilities and transport orders — of 3.2%, the first decline in three months.
On Thursday, Japan’s latest GDP figures are expected to show that the country’s economy expanded 0.9% during the first quarter of 2012 after contracting by 0.2% in the final quarter of 2011.
Beyond Japan, other notable releases include GDP and retail sales data in Singapore on Tuesday and consumer confidence and producer inflation data in Australia on Wednesday.
South America
A slew of data from Brazil — where policymakers have been balancing growth concerns against accelerating inflation — is likely to dominate South American economic news this week.
On Monday, economists expect government statistics to show that the continent’s biggest economy created roughly 200 000 jobs last month, the greatest monthly increase since September of 2011.
On Tuesday and Wednesday, markets anticipate that inflation gauges from the Getulio Vargas Foundation and Foundation Institute of Economic Research will show that price pressures continued in early May after government figures showed that inflation rose 0.64% in April, more than economists had expected.
On Thursday, markets expect retail sales to show annual growth of 11.0% in April, up from the previous month’s 9.6% growth. On Friday, the central bank’s economic activity index is expected to tick up from 0.86% to 2.3%, year on year.
Elsewhere in the region, Venezuela will report lending data on Monday and gross domestic product (GDP) figures on Thursday. Peru will report employment data on Tuesday. Columbia will report trade data on Wednesday and industrial production and retail sales figures on Thursday. Finally, Chile will report GDP and Argentina will release its economic activity index on Friday.
Africa
Statistics South Africa will release March’s retail trade numbers on Wednesday. March’s wholesale trade, civil cases for debt and building statistics, along with February’s motor trade figures, will follow on Thursday.
On a monthly basis, retail sales declined in both January and February and economists expect that the negative trend continued into March.
Elsewhere on the continent, Zimbabwe will release last month’s inflation figures on Tuesday and a number of debt sales further north are likely to garner international interest.
Nigeria and Uganda will hold debt auctions on Wednesday. Nigeria will sell 35-billion naira of five-year sovereign bonds and another 35-billion naira of 10-year bonds. Uganda’s central bank will sell 120-billion shillings of short-term treasury bills.
The central bank of Kenya will also sell 4-billion shillings of 91-day and 182-day treasury bills this week. Analysts expect the auction to be oversubscribed as investors look to lock in comparatively high interest levels.
Inflation in Kenya fell for the fifth month in a row to 13.1% in April from 15.6% in March and is expected to fall further in May, while an auction last week saw yields on the 182-day bill fall to 13.1% from 14.8% the week prior.
Matt Quigley writes the weekly economic preview for the Mail & Guardian. His blog on the South African economy can be found here.