• MON: German Ifo Survey (Apr); US Durable Goods (Mar).
• TUE: BoJ Policy Decision and Outlook Report; Riksbank Policy Decision; MNB Policy Decision; South Korean GDP (Q1).
• WED: FOMC Policy Decision; Australian CPI (Q1), German GfK Sentiment (May); Canadian Retail Sales (Feb), JMMC Meeting.
• THU: German Unemployment Data (Apr) and Prelim CPI (Apr); US GDP and PCE Prices Adv (Q1).
• FRI: Chinese Official PMIs (Apr); Japanese Unemployment Data (Mar); German Flash GDP (Q1); EZ Flash CPI (Apr) and Prelim GDP (Q1); US PCE Price Index (Mar).

NOTE: Previews are listed in day-order

BOJ PREVIEW (TUE): The Bank of Japan is likely to maintain its policy settings, keeping rates at -0.1% and the 10yr JGB yield target at 0.0% (target band at +/-25bps), while it will also release the latest Outlook Report which contains board members’ median forecasts for Real GDP and Core CPI. The consensus for the BoJ to keep policy settings unchanged is due to the timing as the central bank had only recently conducted a framework review in which the outcome was announced at the prior meeting in March where it was reported to have widened the target band to allow yields to fluctuate from the target by +/-25bps from +/-20bps as markets expected, although Governor Kuroda later stated during the press conference that the BoJ did not enhance the yield target range and that it was a clarification of the number of the yield range, not a change. The central bank also removed its annual ETF and J-REITS purchase targets, but maintained the ceiling of those purchases at JPY 12tln and JPY 180bln, respectively, and it announced that it will now only buy ETFs linked to the TOPIX index. With this recent clarification of the wider than previously viewed yield band and tweaks to the stimulus programme which were aimed at making the BoJ’s ultra loose policy more sustainable, it is seen as unlikely for policymakers to announce further adjustments in the immediate term. Therefore, focus will be on the statement and whether there are any changes from the central bank’s usual rhetoric although any significant deviations are unlikely considering that Governor Kuroda has reiterated that they are not at the stage to debate specific timing and means for exiting the ultra-loose policy including ETF buying. The Outlook Report will also be eyed for the central bank’s latest forecasts with Real GDP currently seen at -5.6% for fiscal 2020, 3.9% for fiscal 2021 and 1.8% for fiscal 2022, while the most recent estimates for Core CPI were at -5.5% for fiscal 2020, 3.9% for fiscal 2021 and 1.8% for fiscal 2022. Furthermore, a prior source report stated that the BoJ is to consider lowering its inflation forecast for the current fiscal year, although this wouldn’t be much of a surprise given the continued negative inflation readings for Japan and as the central bank have repeated the view that consumer price growth will remain negative for the time being but then rebound and gradually accelerate the pace of increase thereafter. PM Suga recommended a virus emergency state for Tokyo; analysts will be watching the BoJ's tone for signs it could provide more accommodation amid fears the new restrictions could push Japan back into recession.

RIKSBANK PREVIEW (TUE): Rates are tipped to be left unchanged at 0.00%; in addition, the QE programme will likely be maintained with the current envelope of SEK 700bln and a utilisation period of end-2021. Also, it is likely too early to receive the QE distribution information for Q3. Hence, the focus going into the meeting will be on how the Bank frames the domestic vaccination progress, with circa 25% of adults having received at least one dose now, against the postponement of planned restriction loosening and allowing only a modest easing of rules for the vaccinated. Data wise, core inflation remains a concern printing below Riksbank expectations for February and March; however, this is somewhat offset by improving inflation expectations and a pickup in the labour market and growth indicators. While rates are likely to be left unchanged, it is possible that the rate path could differ from the February release with SEB assigning a 5% chance to it indicating a cut by end-2021 and 10% to a hike by 2024 given the aforementioned inflation concerns and the improved growth/expectation metrics respectively. Overall, policy parameters are likely to be maintained and the repo path continuing to show rates unchanged throughout the horizon while verbally maintaining scope for further easing if the situation (inflation) dictates.

AUSTRALIAN CPI (WED): Q/Q CPI is seen rising 0.9% (prev. 0.9%) whilst the Y/Y is forecast at 1.4% (prev. 0.9%).  Meanwhile, the Weighted Median figures are expected at 0.5% Q/Q (prev. 0.5%) and 1.3% Y/Y (prev. 1.4%) respectively, and the Trimmed Mean metrics are seen at 0.5% (prev. 0.4%) and 1.2% (prev. 1.2%) for Q/Q and Y/Y respectively. Desks highlight upside risks to the release amid the rise in fuel prices in Q1, whilst a lower base figure should bolster the Y/Y metric. Westpac does not expect the Homebuilder grant and the extended Household Electricity Credit to impact inflation this quarter the way it did in recent releases, but the analysts see a sharp reversal of this effect in Q2 as both ended on March 30th. Other key sectors on watch for an upside move include food, alcohol & tobacco, health, auto fuel, and education. Conversely, post-Christmas retail sales, household goods, and audio/computer prices could offset some upside. Westpac expects the headline Q/Q and Y/Y to rise slightly above street expectations, at 1.0% and 1.5% respectively. 

BIDEN 'AMERICAN FAMILIES PLAN' REMARKS (WED): President Biden rarely gives an address where the details have not been leaked in advance, and that makes Wednesday’s remarks to lawmakers somewhat predictable. Reports suggest that, to fund his 'America Families' plan, his administration will propose a capital gains tax as high as 43.4% (39.6% + 3.8% investment income tax from 2013) on those earning over USD 1mln annually, and will propose raising the marginal income tax rate to 39.6% from 37%. As is now also seemingly a custom, the White House said that the President continues to meet with his policy team to finalise details of the plan, and will invite lawmakers to the White House after his address to Congress next week. While the market responded with risk-off as the news was released on Thursday afternoon (these taxes will hit those who own equities, and that group is heavily weighted towards higher earners, of course), observers point out that much of this plan has already been flagged in Biden's Presidential campaign, and there is a feeling that it may have been cynical newswire phrasing of the news that incited the market reaction. Other commentators suggest that the headline was designed to shock and awe, creating a large 'bid-ask' between the White House and the Republican lawmakers (who will in all probability, reject Biden's plan), allowing the administration the flimsy guise that it has ‘compromised’ on the headline, as echoed by Citi's analysts, who were inclined to believe that the initial announcement aims high for the sake of creating a buffer during negotiations, and they add that although the capital gains tax rate might likely be increased in the long-run to finance a broader fiscal package, it is unlikely that the near doubling to 40% sticks. It is probably more useful to listen to some of the more moderate Democrats, like Joe Manchin, the Democrat with some centrist tendencies, making his position a little inconvenient for the leftist redistribution policies of the administration; Manchin has become extremely influential since the Congressional margins are so thin, the Democrats will need almost 100% participation from its own side of the aisle to carry any legislation. the influence of Manchin himself was evident during the latest batch of corporation tax news flow, where he expressed dissatisfaction with a hike to 28% from 21%, favouring a level around 25% - he also claimed others within the Democrats agreed with him. Elsewhere, an interesting point is being made by analysts regarding the phrasing of the Biden administration’s fiscal policies: it has become easy to frame it all as ‘stimulus’, or ‘fiscal largesse’, and while this is accurate to some extent, it should be noted that Biden’s latest agenda seems to be more ‘tax and spend’, implying less deficit pressure – this is one reason why recent fiscal headlines have failed to deliver the bullish risk catalysts seen in wake of the stimulus plan presented at the beginning of the year.

FOMC PREVIEW (WED): Most analysts have been suggesting that the FOMC April confab will be a snoozer, a holding meeting before it provides more explicit signals about how it will tweak its asset purchases (likely at the June meeting). But UBS is on alert for potential guides next week. The bank will be focussing on whether Chair Powell indicates "it is likely to take some time for substantial further progress to be achieved," language introduced at the January meeting. UBS notes that no FOMC member has used the words "some time" to refer specifically to tapering since, and "against this backdrop, we assign a high probability (but decidedly less than 100%) to the scenario where Powell drops this phrase from his prepared remarks"; if so, UBS will take it as confirmation that a broad discussion around tapering within the Fed is already under way. Chair Powell has frequently stated that when the Fed sees it is "on track" to achieve substantial further progress, it will communicate this fact and become more concrete about the timing of a taper. There is a line of thinking that Fedspeak has tilted more hawkish since the March meeting, with some officials now openly warning about the financial risks that can be created by overly loose policy, while the Fed chair himself recently acknowledged that the economy was at an inflection point. "We expect that at the June meeting the Fed will say, probably in the statement, that the economy is 'on track' to achieve substantial further progress -- this language would strengthen our conviction that the formal taper will be announced in September." However, the bank assigns a one-in-three chance that this language could make it into the April statement, and if this transpires, there would be an increasing probability that the taper is announced in June or even July, UBS says; the bank thinks this will ultimately come at the September meeting. Elsewhere, analysts will be on the lookout for any tweaks to the Fed’s bond buying, after recent remarks from NY Fed official intimated that the central bank could adjust the WAMs of its purchases to match the Treasury’s issuance profile (which has been lengthening); such a change would be framed as technical, and not indicative about the course of monpol. It is also likely that the announcement would come from the NY Fed, rather than the FOMC, to underscore this point further.

CANADIAN RETAIL SALES (WED): StatsCan's flash estimate for Feb retail sales is +4.0%, partially rebounding after the -1.1% seen in January, and the -3.4% seen in December. Canadian bank RBC points out that the February data will feature the start of reopenings, with in-store shopping resuming in many parts of the country; "we expect another strong ‘flash’ estimate for March as reopenings continued, with RBC Economics’ Consumer Spending  Tracker suggesting an approximately 1–2% increase in the month," the bank writes, "However, focus has already turned to the third wave of cases/restrictions, and its impact on April activity, with spending tracking around 1.5% lower in the first half of April, and a further decline expected in  the coming  weeks."

JMMC MEETING (WED): At this point, it is still unclear whether members will convene for a decision-making ministerial meeting following the technical JMMC confab. The latest sources via EnergyIntel suggested both will go ahead on the 28th of April, although other reports put more emphasis on the “monitoring” aspect whilst playing down the likelihood of a tweak to the last set quotas through to July. For any changes to occur, the ministerial meeting will have to go ahead. Since the prior confab, whereby the group agreed to ease output curbs by 350k BPD in each May and June followed by 450k BPD in July, whilst Saudi will return its 1mln voluntary cut by increments of 250k BPD, 350k BPD, and 400k BPD in the three months to July – with a total of some 2.1mln BPD poised to return to the market from May-July. Since then, the COVID situation has worsened in some economies – namely India, with FGE consultancy estimating a demand impact of 500k BPD from India’s outbreak alone. On the flip side, the vaccination drive continues to be swift in some economies, with the US administering over 200mln shots within Biden’s first 100 days in office, whilst seasonal demand is also expected to solidify heading into the summer months. Elsewhere, Libyan supply is again on the balance as a lack of funding and a force majeure at one of its ports have taken the country’s output back below 1mln BPD for the first time since October last year. Libya is currently exempt from OPEC+ quotas. Conversely, Iranian JCPOA talks are seemingly constructive as the US is reportedly ready to ease some sanctions, including oil-related restrictions, in return for Tehran’s cooperation. Meanwhile, geopolitical tensions remain high in the middle east as Yemeni Houthis continue to target Saudi’s oil infrastructure in its latest attacks, whilst Israel and Iran recently clashed. Finally, the US NOPEC bill has been turning eyes after a US House panel passed the bill which would allow the US Justice Department to bring anti-trust lawsuits against OPEC members for manipulating oil prices, which are then fed through to American consumers. This development is unlikely to be much of an influence at the upcoming meeting but could materialise into more of a tail risk during the year. 

US GDP ADV (THU): Advanced data for Q1 is expected to show US growth of +5.7% vs Q4’s 4.3%; some flag scope for an upside surprise, however, given that the Atlanta Fed’s GDPnow model is tracking growth at 8.3% in the quarter. Consumer spending may drive much of the acceleration, Credit Suisse says, noting that the recent rounds of fiscal stimulus and progress on reopening the economy on the back of the vaccination campaigns will have supported the consumer. The bank believes that consumption growth should remain supported in upcoming months as the reopening process continues. Business investment is also seen remaining firm at around 15.0% Q/Q annualised, and CS thinks equipment and intellectual property investment should pick-up for the third straight quarter, arguing that business sentiment remains elevated, and further reopenings should provide support here too for capex. Ahead, CS expects GDP growth to continue its acceleration, with fiscal support and reduced social distancing leading to further acceleration in demand.

CHINESE OFFICIAL PMI (FRI): Chinese Official PMI data is scheduled next Friday which is expected to show a 14th consecutive month in expansion territory albeit at a slower pace than the prior month with estimates at 51.2 vs prev. 51.9. The data releases from China have been strong so far this year amid a continued rebound in the economy from the pandemic, as well as heightened global demand for medical goods and electronic equipment. This has resulted in a double digit percentage surge in the nation’s Q1 GDP of 18.3% Y/Y and Chinese Industrial Production also grew by 14.1% Y/Y in March which was largely helped by base effects but nonetheless provides encouragement regarding the ongoing momentum in the economy. The upcoming release will include Official Non-Manufacturing PMI data that had surged to a 4-month high in March of 56.3 (Prev. 51.4) and which points to a continued improvement of domestic demand, while the prior Composite PMI which measures both the manufacturing and services sectors printed 55.3 (Prev. 51.6).

EZ FLASH CPI/PRELIM GDP (FRI): Inflation metrics for the Eurozone are set to reveal another uptick in headline Y/Y CPI to 1.6% from 1.3% with the super-core (ex-food, energy, alcohol & tobacco) seen remaining at 0.9%. The uptick in the headline metric is set to be largely-attributable to the widely-flagged Y/Y base effects from the slump in energy prices last April and therefore will come as little surprise to the market. Furthermore, the ECB has continued to stress the transitory nature of such distortions, and states that "these factors can be expected to fade out of annual inflation rates early next year", adding that "survey-based measures and market-based indicators of longer-term inflation expectations remain at subdued levels". From a growth perspective, flash Q1 GDP Q/Q is forecast to contract 1% vs the 0.7% decline seen in Q4 2020. The release comes against a backdrop of tightening restrictions across the Eurozone. RBC notes that Germany spent almost the whole of Q1 in lockdown; the Canadian bank forecasts a contraction of just 0.5% suggests that, in-fitting with the performance of other advanced economies, the Eurozone has continued to adapt to the pandemic, and therefore, the impact from lockdown restrictions will be less severe than those seen last year. As has been the case throughout the pandemic, market participants might see the report as slightly stale, and instead prefer timelier releases such as the Markit PMIs, the latest of which showed a return expansionary territory for the service sector in April with the composite reading standing at 53.7 as the region's vaccine campaign continues to pick up steam.