Developments in the US financial sector may have a visible effect on the US Consumer Confidence Index and other data reported next week.
Tuesday 28.03. 14:00 GMT, US Conference Board Consumer Confidence (March)
Conference Board (CB) Consumer Confidence index measures the consumer confidence level in economic activity. It is a leading indicator that can predict consumer spending, which plays a significant role in overall economic activity. Higher readings indicate greater consumer optimism. A reference point of 100 that is used is the consumer confidence index from 1985.
Last month's consumer confidence reading was lower than expected, coming in at 102.9 versus a forecast of 108.5. The reading for March is expected to fall even further to 101.0, which could be a sign of volatility in the financial system as consumers become more concerned about the safety of their deposits.
Higher than expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD.
Impact: USD
Thursday 30.03. 12:00 GMT, Germany Consumer Price Index (CPI) YoY (March preliminary reading)
The CPI measures the change in prices consumers pay for a given basket of goods and services compared to a year ago. The CPI is the most widely used measure of inflation - a higher index means higher inflation.
Inflation in Germany, as measured by the CPI, appears to have stayed at 8.7% for the past three months - a level well above the central bank's target. Preliminary CPI data for March are expected to come in at 8.5%, down slightly from 8.7% in the previous month.
Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.
Impact: EUR, DAX
Friday 31.03. 01:30 GMT, China Manufacturing Purchasing Managers Index (PMI)
The Purchasing Managers Index (PMI) provides the first indication of economic activity in the Chinese manufacturing sector as purchasing managers are considered to have access to first-hand data regarding the performance of their companies.
A reading above 50 indicates expansion, while a reading below 50 indicates contraction in the manufacturing sector. China's PMI spent most of 2022 in contraction territory, as the economy faced production disruptions due to the Covid-19 pandemic.
Last month's PMI showed a positive surprise in China's manufacturing sector. It was reported at 52.6 – the highest number since 2012. However, the official forecast for March is the same as the previous month - 50.5 - suggesting that further expansion may slow down but remain positive. The weak starting point for the economy at the beginning of this year may explain the higher-than-expected PMI in February. Therefore, as the pace of recovery slows, the PMI may also show lower growth.
Better-than-expected results may be seen as bullish for the CNY, while lower results may be bearish for the CNY.
Impact: CNY
Friday 31.03. 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY
Germany's CPI data which will be reported a day earlier, may provide insight into what might be expected from the eurozone CPI. According to expectations published by Trading Economics, the eurozone inflation by the end of March might be 7.8% which is considerably lower than the official forecast of 8.2%. The preliminary data for March CPI may signal the impact of the ECB's decision to increase the interest rate by 50 bp last week despite the volatility within the financial system.
Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.
Impact: EUR, DAX, STOXX
Stocks to watch
BioNTech (BNTX) announcing its earnings results for the quarter ending on 12/2022. Forecast: 8.1. Positive earnings surprise in 7 out of the last 10 reports. Time: Monday, March 27, after the market closes.
Micron Technology Inc (MU) announcing its earnings results for the quarter ending on 02/2023. Forecast: -0.6449. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, March 28, after the market closes.
Cintas Corporation (CTAS) announcing its earnings results for the quarter ending on 02/2023. Forecast: 3.04. Positive earnings surprise in 10 out of the last 10 reports. Time: Wednesday, March 29, before the market opens.
H & M Hennes & Mauritz AB B (0HBP) announcing its earnings results for the quarter ending on 02/2023. Forecast: -0.6292. Positive earnings surprise in 6 out of the last 10 reports. Time: Thursday, March 30, before the market opens.
Industrial Commercial Bank of China (IDCBY) announcing its earnings results for the quarter ending on 12/2022. Forecast: 0.6293. Positive earnings surprise in 7 out of the last 10 reports. Time: Friday, March 31.
Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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