The Week Ahead

During the week ahead the market is likely to look towards a number of key market themes and events which have the potential to indicate financial market moves.

The economic calendar is jammed packed with Chinese and UK data this week. Inflation from the UK and GDP from the Chinese economy headline the data dump.

CHINA GDP + Retail Sales

Market are poised for GDP data from China this week, with growth seen speeding up to 4.0% in the first quarter from a year earlier, from 2.9% in the previous three months.

If this happen it would be the fastest growth since the first quarter of last year, which could maybe trigger a run higher in stock, the Australian dollar and Copper prices.

This year’s more conservative target of 5% should be easier to meet now that Covid restrictions have been lifted. It was probably set on the basis that it’s better to under-promise and over-deliver than to do the exact opposite.

In Q4 China’s economy grew 2.9% on an annual basis, according to official data. Even this figure seems somewhat dubious when you look at the data for retail sales and industrial production.

Overall, Q1 could see a growth rebound, driven not only by the post-lockdown reopening and Chinese New Year spending plus more overall positivity.

UK CPI + JOBS

UK CPI is expected to dip this week, would could provide a welcome boost for sterling and the FTSE as inflation dipping is what is currently needed to boost the economy.

Last month the UK’s consumer price index (CPI) unexpectedly increased 10.4% in the year to February, up from 10.1% in January, driven by soaring food prices.

Economists had expected the headline rate of inflation to dip to 9.9%. Still if we see inflation moving lower this week expect a positive reaction from markets.