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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Ahead of the game: May 1, 2023

Your second weekly financial calendar for market insights and key economic indicators for May 1, 2023.

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Reading time: 5 minutes

US STOCKS REBOUNDED into the end of the week as the stream of red-hot earnings from the tech giants wrenched the narrative away from regional banking woes, slowing growth and higher-than-expected inflation.

With one trading session left in April, the Nasdaq (-0.16%) is trading flat for the month, consolidating its 9.46% gain in March. The S&P 500 has gained 0.63% in April, and the Dow Jones is up 552 points (1.66%), the bulk of which came from last night’s eye-popping rally.

  • Australian Q1 2023 CPI report showed a slight increase in headline inflation to 7% YoY, slightly above expectations but lower than the previous quarter
  • Core inflation, or the trimmed mean, slowed to 6.6% YoY, below consensus expectations
  • RBA is expected to keep the cash rate on hold at 3.60% due to inflation momentum slowing
  • Meta and Microsoft reported earnings beat expectations leading to a rise in share prices
  • First Republic, a US Regional Bank, reported a 70% drop in share prices due to a decrease in deposits and plans to offload long-dated mortgages and securities
  • Crude oil prices fell further below the pre-OPEC+ supply cut announcement level
  • The VIX index rallied over 20% due to concerns about the US banking system, particularly First Republic Bank.

  • AU - RBA Interest Rate Meeting (Tuesday, May 2nd at 2.30pm AEST)
  • AU – Retail Sales (Wednesday, May 3rd at 11.30am AEST)
  • NZ - Q1 Employment Report (Wednesday, May 3rd at 8.45pm AEST)

  • Ch – Caixin Manufacturing PMI (Thursday, May 4 at 11.45am AEST)
  • Ch - Caixin Service PMI (Friday, May 5 at 11.45am AEST)
  • Ch – Caixin Composite PMI (Friday, May 5 at 11.45am AEST)

  • US - ISM Manufacturing PMI (Tuesday, May 2 at 12.00am AEST)
  • US - JOLTS Job Openings (Wednesday, May 3 at 12.00am AEST)
  • US - ISM Services PMI (Thursday, May 4 at 12.00am AEST)
  • US – FOMC Interest Rate Meeting (Thursday, May 4 at 4.00am AEST)
  • US – Non-Farm Payrolls (Friday, May 5 at 10.30pm AEST)

  • EA – Inflation (Tuesday, May 2 at 7pm AEST)
  • EA – ECB Interest Rate meeting (Thursday, May 4 at 10.15pm AEST)
  • GE – Factory Orders (Friday, May 5 at 4.00pm AEST)
  • EA – Retail Sales (Friday, May 5 at 7.00pm AEST)

Source: Bloomberg
  • Australia

RBA Board Meeting

Tuesday, May 2 at 2.30pm AEST

The Reserve Bank Board of Australia is scheduled to meet next Tuesday, the 2nd of May, at 2.30pm to discuss its monetary policy settings.

In April, the RBA paused its rate hiking cycle after delivering a cumulative 350 basis points of rate hikes to allow time to assess the impact of tighter monetary policy on the economy during a time of uncertainty.

As part of its assessments in deliberating how much further interest rates need to increase, the Board would be paying close attention to "developments in the global economy, trends in household spending and the outlook for inflation and the labour market."

The Q1 2023 Australian CPI report released this week indicates inflation peaked at the end of last year, and its momentum is slowing.

Elsewhere, while the labour market remains tight, household spending has slowed in response to the cost-of-living pressures of elevated inflation and higher interest rates.

In summary, the interest rate market is confident, as we are, that the RBA will keep rates on hold in May at 3.60%.

RBA cash rate chart

Source: RBA
  • US

Q1 2023 earnings reports

Earnings reports from companies including AMD, Starbucks, Uber, Ford, Apple, Coinbase and Berkshire Hathaway are set to flow in the coming week.

FOMC Meeting

Thursday, May 4th at 4.00am AEST


At its meeting in March, the FOMC raised its Fed funds rate by 25bp to a range of 4.75-5%.

The minutes from the meeting showed that FOMC members anticipated some additional policy firming might be appropriate to return inflation to 2% and that the impact of the banking crisis lowered the assessment of the Feds terminal rate.

At its meeting next in May, the FOMC is expected to lift rates by 25bp, taking the Feds Fund rate into a range of 5-5.25%. The FOMC is expected to signal a pause and retain a tightening bias using wording like the RBA - noting that the timing and size of future rate hikes will depend on incoming data.

The Fed also note that interest rates will likely remain high for an extended period which contrasts with the rates markets pricing of 70bp of rate cuts from July into year-end.

Fed funds rate chart

Source: TradingEconomics

  • EA

ECB interest rate meeting

Thursday, May 4th at 10.15pm AEST

Last month the ECB raised its key deposit facility by 50bp to 3% and noted that “if our [the ECB’s] baseline was to persist when the uncertainty reduces, we know that we have a lot more ground to cover”.

Labour market data has since come in stronger than expected and next week’s inflation data is expected to show that core inflation rose by 5.7% in April, remaining sticky at a record high.

The April flash PMIs suggest that activity is accelerating at the start of Q2.

This week, ECB Executive Board Member Schnabel commented, “50 basis points are not off the table”, a reminder that the ECB decision will be a close call between a 25bp hike or a 50bp hike.

We are leaning narrowly towards a 25bp rate hike in May, followed by two further 25bp rate hikes, which would see the terminal deposit rate of 3.75%.

Euro Area deposit facility rate chart

Source: TradingEconomics

Economics calendar

All times shown in AEST (UTC+10) unless otherwise stated

Source: DailyFX
Source: DailyFX
Source: DailyFX
Source: DailyFX
Source: DailyFX
Source: DailyFX

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