Key events to watch in the week ahead: 1 - 7 April 2024

This week’s overview

The holiday-shortened week saw Wall Street taking a breather following a touch of yet another fresh record high last week. The economic calendar offered little to tap on, apart from the upcoming US core Personal Consumption Expenditures (PCE) price index release on Friday, which may influence the Federal Reserve (Fed)’s rate path ahead.

But with policymakers revealing some tolerance for slightly higher inflation at the recent meeting, it may potentially have to take much more to sway their views of keeping to three rate cuts through 2024.

As we head into the new week, here are three things on our radar.

2 April 2024 (Tuesday, 8.30am SGT): Reserve Bank of Australia (RBA) meeting minutes

At the recent RBA meeting, the central bank held rates steady at 4.35% for the third straight meeting as expected. However, the central bank watered down its tightening bias by removing a previous phrasing that "a further increase in interest rates cannot be ruled out", while Governor Michelle Bullock saw the current risks as being “finely balanced”.

Recent inflation data has also validated the RBA’s view, with a lower-than-expected read bringing some confidence that inflation may remain under control amid current tight monetary conditions. Market expectations are well-anchored for a peak in rates, with market participants now looking for rate cuts as early as August. With that, the minutes will be sought for any clues pertaining to the timeline for rate cuts, and the factors or data which may prompt the central bank to act earlier in its policy easing.

3 April 2024 (Wednesday, 5pm SGT): Eurozone’s flash inflation rate

Both headline and core inflation in the Eurozone has shown a clear declining trend since their peaks in 2023, with the core aspect registering a 3.1% increase in February this year – its lowest level in almost two years. The headline read has also eased to just 2.6% in February versus its peak of 10.6%, reflecting the ongoing success of current tight monetary conditions in the inflation fight.

With growing calls among European Central Bank (ECB) policymakers for imminent policy easing, further inflation progress will provide more room for the central bank to consider earlier rate cuts. Ahead, expectations are for the headline read to ease to 2.5% in March, down from previous 2.6%. The preliminary inflation rate for Germany will be released on 2 April, Tuesday at 8pm.

5 April 2024 (Friday, 8.30pm SGT): US non-farm payrolls

At the recent Fed meeting, US policymakers have revealed some tolerance for slightly higher inflation, sticking to their view for three rate cuts through 2024 while acknowledging that the inflation path towards its 2% target will be “bumpy”. However, with markets looking for the Fed to kickstart its rate-cutting process as early as the June meeting, any further signs of cooling in the US jobs market will be much-needed to validate such timeline.

In Fed Chair Jerome Powell’s previous comments, he acknowledged that labour supply and demand conditions “continue to come into better balance”, and will look to reduce rates if there were to be a “significant weakening” in the labour market.

Ahead, expectations are for the US economy to add 200,000 jobs in March, down from the 275,000 in February, while the unemployment rate is expected to stay unchanged at 3.9%. Earnings growth is expected to increase 0.3% month-on-month, up from the previous 0.1%.