Explore Special Offers & White Papers from ADMIS

Macroeconomics: The Day Ahead for 21 May

  • Somewhat busier day has RBA minutes, German PPI and Korea Trade to digest ahead of UK CBI Industrial Trends and Canada CPI; plenty more central bank speakers and EM rate decisions; UK 19-yr and German 5-yr debt sales

  • Canada CPI: above seasonal trend m/m increase expected, but y/y rates seen falling on headline and core measures again, door to rate cut would be pushed wider

  • UK CPI: energy price cap cut to pace headline y/y drop, but core measures also seen falling sharply, but remaining high

EVENTS PREVIEW

A busier though not overwhelming day awaits, with the May RBA minutes, Korea Trade and German PPI to digest ahead of the UK CBI industrial Trends survey and Canadian CPI. There are numerous Fed and other central bank speakers, with rate decisions in Hungary (50 bps cut), Nigeria (200 bps hike) and Paraguay (no change). The IEA start its 2-day Global Energy Efficiency conference, while the UK sells 19-yr and German 5-yr debt. Chinese automakers and US Retailers top the modest run of earnings, via way of results from Great Wall Motor, Xpeng, Lowe’s and Macy’s, which feature along with Generali. The RBA minutes did note a rate hike was discussed, but dismissed as being likely to be a case of too much fine tuning, and data in the meantime has more than vindicated that standpoint.

 

** Canada – April CPI **

– In contrast to the US, Canadian CPI has been surprising on the downside this year, and while energy prices (above all gasoline) and Housing related prices will give a boost, the latter being more of a concern for the BoC, the combination of base effects and downward pressure from autos and perhaps health care and clothing should limit the m/m rise to 0.5% m/m. That would see headline y/y edge down to 2.7% y/y, and a more meaningful 0.2 ppt dop in median and trimmed mean Core CPI measures to 2.7% and 2.9% y/y respectively. If correct, then the door to a July BoC rate cut would be pushed that much wider.

 

** U.K. – April CPI & PPI **

– The lowering of the household energy price cap will be the key factor behind a modest 0.1% m/m rise in CPI tomorrow, which would see the y/y rate tumble to just 2.1%, with Core and Services CPI also seen falling quite sharply to 3.6% and 5.4% y/y respectively from 4.2% and 6.0%, but remaining elevated. Food prices should also continue to moderate (as per the BRC’s Shop Price Index), and the extent to which there is further evidence that pass through of cost pressures is easing, or becoming more difficult, and in that context, PPI measures are expected to remain modest, with energy prices likely accounting for most of the 0.4% m/m increases seen on both PPI Input and Output.

To view the full report and to sign up for daily market commentary please email admisi@admisi.com

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started