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By HaleStewart April 6, 2015 9:00 am
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International Economic Preview For the Week of April 6-10

 

     The following economic releases will have a disproportionate impact on the markets this week.

Monday

Russian Inflation: despite having high interest rates, Russian inflation is still over 16%, most likely caused by the dropping Ruble.  Although the currency has rebounded somewhat, it is still at low levels, indicating inflation will probably continue at high rates.

US ISM Services: a surprise miss in the ISM manufacturing data last week sent the markets lower.  In contrast, the services index has been rising over the last few months.  Pay particular attention to the anecdotal notes contained in the report, focusing on comments about the oil market, strong dollar and weather issues.

Australian interest rate decision: Despite growing over 2% for the last four quarters, the Australian economy is attempting to make the transition from an economy based on natural resource exports to one with a broader basis of growth.  The changeover is going poorly.  Pay attention to the central bank’s comments on the underlying condition of the economy, focusing on phrases such as, “below trend growth.”

Tuesday

Markit EU numbers: Markit releases their final composite numbers for not only the EU but also all other EU countries.  The EU composite number is rising, which is a prime reason for the hopeful analysis of the current EU environment.

Japanese rate decision: While the BOJ has provided no reason to think they will change course, focus on any talk about the current level of Japanese inflation.

Wednesday

EU Retail Sales: This number has been over 3% Y/Y in the last two readings, indicating EU shoppers are spending the savings from lower gas prices.  As retail sales are a coincident indicator, this is a very positive development.

Fed Minutes: analysts are concerned about recent US macro-level weakness.  Let’s see if the Fed shares this concern.

Thursday

UK Interest Rate Decision: The UK economy is in a sweet spot: they have decent growth and low inflation.  There is no reason to think the Bank of England will change policy at this meeting.

Friday

Canadian Employment Report: The Canadian Central bank recently lowered rates 25 basis points in an economic pre-emptive strike against oil’s price drop.  Several Canadian central bankers have publicly commented that Canada faces a difficult 6-12 months because of oil’s weakness.  This report may indicate oil patch weakness is beginning to take hold in the economy.

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer  

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