Investors brace for big week of insights into world economy

Bloomberg

The world economy’s ability to rebound from its recent soft patch will be tested anew as data is released from Washington to Beijing.
Federal Reserve officials conclude a meeting on Wednesday amid expectations they won’t change their monetary policy settings as counterparts elsewhere follow its dovish turn.
A press conference by Chairman Jerome Powell will be eyed for insights into his view of the policy outlook as well as what he’s thinking about his inflation target and bond portfolio.
“While the Fed is not expected to take any policy action at its May 1 meeting, there will be plenty of action behind
the scenes,” said Carl Riccadonna, chief US economist at Bloomberg Economics.
Perhaps as interesting will be a flood of data in the aftermath of the news that US economic growth accelerated markedly in the first quarter, albeit driven by advances in trade and inventories, which may reverse.
The high point will be Friday’s release of the US jobs report for April, with a gain of 180,000 expected by the consensus of economists surveyed by Bloomberg News. A survey of manufacturers on Wednesday is also expected to show some signs of stabilising.
Elsewhere, China releases its purchasing managers index on Tuesday, the same day that the euro-area is predicted to show its economy steadied in the
first quarter.
Other major data due include the US report on personal income and spending on Monday, which is forecast to show spending outpacing income. On Wednesday, the Treasury will reveal its latest plan to keep selling debt to plug a record budget deficit. The US and China will resume trade talks in Beijing amid hopes a deal is imminent. Canada will reveal on Tuesday how its economy performed during the first quarter.
France and Italy release output data on Tuesday which, along with the euro-area number, will help provide a more definitive picture of the first quarter, when the European Central Bank became alarmed enough about the slowdown to reactivate its stimulus stance. The modest acceleration seen by economists might provide a basis for policy makers to conclude the current soft patch has stabilised. The Bank of England is set to leave monetary policy unchanged on Thursday.
China’s PMI reports will be closely watched on Tuesday, with economists expecting a further improvement in the factory gauge in April. That would reinforce economists’ recent bet that the worst may be behind the world’s second-biggest economy and that stimulus efforts may be dialed back a notch. Meantime, the next round of China-US trade talks will get under way in Beijing. While analysts have begun to bake in expectations for some form of agreement, global investors are still awaiting a date for President Donald Trump and President Xi Jinping to sign an accord.
Mexico’s first quarter GDP, due on Tuesday, will show just how much Latin America’s second-largest economy slowed in the beginning of President Andres Manuel Lopez Obrador’s administration.