China will continue its momentum by broadening its recovery: Eco Week


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China’s robust economic momentum appears to have continued into the second quarter as its factory-led recovery spread to the consumer – while strengthening inflationary pressures.

Industrial production likely rose 10% in April from a year earlier, while retail sales rose 25% during the period, analysts said for data due Monday.

Combined with this month’s report showing continuous export boom even with slower credit expansion, such evidence of a more widespread rebound would indicate that China continues to be a major engine of global growth this year.

The country has consolidated its role as a global factory, producing and selling everything from oxygen concentrators and face masks to cellphones and home improvement supplies.

His The rapid recovery from the coronavirus crisis last year not only boosted the national economy, but also the profits of international companies, even as sales of cars, consumer goods and luxury goods plummeted on their markets. national markets.

As the first major country to enter and exit pandemic lockdowns, China’s figures will provide a guide to what global data might look like as developed country economies normalize.

What Bloomberg Economics Says:

“China’s activity data for April should show the recovery extending into the second quarter. Investment has likely picked up, adding to strong external demand to support industrial production. Consumption likely rebounded again as more people traveled on important vacations.

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Elsewhere this week, Japanese production data is expected to show a contraction in the first quarter and UK figures are likely to show a spike in inflation in April. Eurozone and Canada publish financial stability reviews, and central banks in South Africa, Iceland and Zambia make rate decisions.

Central bank rate decisions this week


Click here to see what happened over the past week and here’s our roundup of what’s happening in the global economy.

United States and Canada

Central bankers will likely be on the ground intensifying questions this week about the pace of inflation after the US consumer price data has skyrocketed past estimates. Federal Reserve Vice Chairman Richard Clarida as well as regional Fed Chairmen including Raphael Bostic and Jim Bullard will speak. Investors will also browse the Fed minutes last meeting, which is due to be posted on Wednesday.

Other U.S. economic data to watch include housing starts, weekly jobless claims and house sales.

Investors will watch the latest reading of weekly jobless claims in the United States

Meanwhile, in Canada, inflation data and a financial stability press conference by Bank of Canada Governor Tiff Macklem are the main highlights for the week.

Asia

Japan finds out on Tuesday how the economy was rocked by a second state of emergency in the first quarter. Economists expect a 4.5% contraction, but if more resilience is shown, it will increase the country’s chances of avoiding a double-dip recession as a the renewed urgency continues.

Japan's economy likely contracted 4.5% in the first quarter

Trade figures released on Thursday are expected to show that global demand continues to support the economy as virus restrictions limit local consumption, and inflation figures on Friday are likely to show the kind of global price pressures that are creating markets nervous remain far away for Japan.

Australia’s first-quarter wage report on Wednesday and April employment data, due Thursday, will help check the pulse of the labor market, which the government and central bank are looking to heat with their double hit stimulus. New Zealand announces its budget Thursday.

Europe, Middle East, Africa

Bank of England now forecasting lower peak in UK unemployment due to rebound The coronavirus crisis is accelerating, evidence of this prospect starting to materialize can be confirmed with the labor market data expected on Tuesday.

Consumer prices – possibly showing a temporary spike in inflation – along with retail sales and a purchasing managers index are among other reports that could provide further signs of improving the health of the economy in tandem with loosening of restrictions and progress on immunization.

Inflation likely peaked in April, while unemployment stabilized in March

Meanwhile in the eurozone, whose recovery is Less mature than that of the UK, another indicator of the expansion of factories and services could help European Central Bank policymakers determine whether their assessment of a recovery in the current quarter is correct.

Monetary officials expected to speak include ECB President Christine Lagarde and Chief Economist Philip Lane, and furthermore, the institution will release its Financial Stability Review on Wednesday at a time of growing global concern. at high asset prices.

Elsewhere in Europe, Iceland will make its latest monetary decision, while Russian data could show the economy there contracted 1.2% in the first quarter as its central bank turned around more belligerent against rising inflationary pressures.

Israel will also release first-quarter GDP on Tuesday – the Bank of Israel said it expects strong growth for 2021 at 6.3% in one of the world’s leading economies to reopen after vaccinations.

In Africa, Zambia, with its currency at an all-time high, and Mozambique, after aggressive tightening in January, will likely keep policy rates unchanged on Wednesday. South Africa is expected to maintain its buyout rate on Thursday as part of its economic recovery remains fragile.

Latin America

On Monday in Peru, Lima’s unemployment report for April could show a better reading while March’s economic activity may have jumped thanks to improving conditions and because of the annual comparison to last year’s foreclosure freeze.

Argentina’s economic activity indicator for March is also likely to rise due to the same so-called base effect.

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Argentina’s economy since 1994 is a story of boom and bust

Sources: Instituto Nacional de Estadistica y Censos, Bloomberg


In Brazil, as analysts mark their 2021 Production forecasts, Latin America’s largest economy has accumulated impressive trade surpluses. Look for this trend to continue in the weekly data on Monday.

Later in the week, first-quarter production data from Chile and Peru could be below previous forecasts given the persistence of Covid-19 in the region. Look for a strong rebound in second quarter numbers, although a resurgence of the pandemic remains a significant downside risk.

Mexico’s retail sales data for March on Friday could suggest more than just a base effect is at work.

– With assistance from James Mayger, Malcolm Scott, Robert Jameson, Benjamin Harvey, Peggy Collins and Theophilos Argitis

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