Welcome to Michael Kramer’s pick of the top three market events to look out for in the week beginning Monday 7 April.
The big US banks kick off what is likely to be an interesting corporate earnings season in the wake of Donald Trump’s tariffs and the heightened sense of economic uncertainty. Trump’s ‘reciprocal’ levies announcement on Wednesday sent the S&P 500 4.8% lower on Thursday, its biggest one-day drop since Covid in 2020.
Also coming up are the March readings of the US consumer price index (CPI) on Thursday and the producer price index (PPI) on Friday. Inflation could rise in the future if the tariff-induced increases in import costs are passed on to US consumers, though it may take time for the full impact of the tariffs to show up in the CPI and PPI data.
In the UK, meanwhile, February GDP data out on Friday could shed light on whether the Bank of England’s recent interest rate cuts are helping to boost growth. Policymakers cut rates in August 2024 (from 5.25% to 5%), in November (to 4.75%) and again in February 2025 (to the current rate of 4.5%).
US March CPI
Thursday 10 April
Analysts estimate that US CPI rose 2.5% in the year to March, easing from 2.8% in February. Core CPI, which excludes volatile food and energy prices, is expected to have increased 3% year-on-year, down from 3.1% in February. On a monthly basis, headline CPI is thought to have increased 0.2%, with core CPI up 0.3%.
On Friday, PPI is expected to come in at 3%, down from 3.2% in February. Analysts use the CPI and PPI readings to estimate the Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, the next reading of which is due out later this month.
Trump’s tariffs have changed the outlook for US inflation, which may be set to rise if importers pass on higher costs to consumers. Should the March inflation figures come in higher than expected, the inflation outlook could deteriorate even further. Implementing the tariffs on top of hot inflation data might raise fears of stagflation – a combination of slowing growth and rising inflation. In that scenario, the US dollar might continue to weaken, potentially benefiting the Japanese yen. Having broken below support at ¥147 on Thursday, USD/JPY could be on its way towards the next key support area near ¥142.
USD/JPY, April 2024 - present
UK February GDP
Friday 11 April
After the UK economy unexpectedly shrank 0.1% month-on-month in January, down from a 0.4% increase in December, economists estimate that gross domestic product grew 0.1% in February. With growth tepid, and given that the market turmoil brought on by Trump’s tariffs could run into a second week, the GDP report may not significantly affect the pound.
The pound looks slightly overextended, with GBP/USD having tested resistance near $1.32 on Thursday before slipping back to $1.297. That said, if the pound benefits from further dollar weakness, the pair could strengthen back above $1.30. If GBP/USD clears $1.31, then $1.342 may become the next upside target.
GBP/USD, October 2024 - present
JPMorgan Chase Q1 earnings
Friday 11 April
BlackRock, Morgan Stanley and Wells Fargo are among the US financial heavyweights kicking off a fresh US earnings season on Friday, but JPMorgan will be the one to watch. Analysts expect the largest US bank by assets to report that first-quarter earnings grew 3.7% year-on-year to $4.60 a share. Revenue is forecast to have increased 3.4% to $43.98bn. Looking ahead to Q2, analysts forecast earnings of $4.57 a share on revenue of $44bn. The options market points to an implied move of 5% up or down following the Q1 results.
The JPMorgan share price closed at $228.69 on Thursday, down 18% from the February high, following a rocky few weeks. The chart below shows the emergence of a possible head-and-shoulders pattern. A break below support at $224 could confirm the pattern. If that support level breaks, the stock might slide to around $205.
JPMorgan Chase share price, October 2023 - present
Key economic and company events
The coming week’s major economic announcements and scheduled US and UK company reports include:
Monday 7 April
• Eurozone: February retail sales
• Germany: February industrial production, imports, exports and trade balance
• Results: Applied Nutrition (HY), Levi Strauss (Q1)
Tuesday 8 April
• Canada: March Ivey purchasing managers’ index (PMI)
• Results: RPM International (Q3)
Wednesday 9 April
• New Zealand: Reserve Bank of New Zealand interest rate decision
• US: Federal Open Market Committee rate-setting meeting minutes
• Results: Delta Air Lines (Q1), Oxford Biomedica (FY)
Thursday 10 April
• China: March consumer price index (CPI)
• US: March CPI, weekly initial jobless claims to 4 April
• Results: Tesco (FY)
Friday 11 April
• Germany: March harmonised CPI
• UK: February gross domestic product (GDP)
• US: March producer price index (PPI), April Michigan consumer sentiment index
• Results: Bank Of New York Mellon (Q1), BlackRock (Q1), Fastenal (Q1), JPMorgan Chase (Q1), Morgan Stanley (Q1), Wells Fargo (Q1)
Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.
Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
