First quarter earnings season will unofficially begin on Monday as aluminium giant Alcoa reports results. Alcoa’s products are used across a variety of industries globally, so the company is seen as a barometer of global manufacturing health. Most analysts expect the company to report lower earnings, due in part to weak demand from Europe.
According to financial research company FactSet, over the past three months, 86 listed companies have warned investors to expect disappointing first-quarter earnings. Only 24 companies issued positive guidance. That translates into the highest ratio of negative to positive updates since FactSet began tracking the data seven years ago.
With no economic data releases scheduled on Monday, markets will focus their attention on remarks from the two most important economic officials in the world’s largest economy. Federal Reserve Chairperson Ben Bernanke will speak in Atlanta about lessons learned from stress-testing banks. Treasury secretary Jack Lew, meanwhile, will meet with European Central Bank president Mario Draghi and European Council president Herman van Rompuy.
The rest of the week is comparatively thin on data as well. Highlights include the National Federation of Independent Business's (NFIB) small business optimism index on Tuesday, jobless claims on Thursday and retail sales figures on Friday.
After a solid improvement in February, NFIB’s index is expected to have remained largely unchanged in March. Weekly jobless claims are forecast to show a 365 000 increase for the week ended April 7, a slight improvement on the previous week’s surprisingly high 385 000 filings. Retail sales likely showed no monthly growth in March.
The European Stability Mechanism’s chief, Klaus Regling, is scheduled to speak at a Faculty of Law, Economics and Finance conference series on Monday at the University of Luxembourg entitled: “Is the Euro crisis over?” He is expected to say no.
Also on Monday, Germany will report February’s industrial production figures. Output in Europe’s largest economy and manufacturing behemoth unexpectedly fell 1.3% in January from the year before. Markets expect to see another year-on-year decline, of 1.1%, in February’s figures.
Production figures from the United Kingdom – Europe’s third largest economy – will follow on Tuesday. Consensus is that industrial output fell by 2.9% in February from a year earlier, the same year-on-year rate of decline observed in January.
Germany, France and the UK will also report February’s merchandise trade data on Tuesday. Markets expect the figures to show Germany’s trade surplus rose to €15.0-billion from €13.7-billion in January. France’s trade deficit likely narrowed from €5.9-billion to €5.5-billion. And the UK’s trade deficit with the rest of the world likely increased to €8.8-billion from €8.2-billion.
More grim figures are expected on Wednesday when France and Italy – Europe’s number two and four economies, respectively – report industrial output. Production in both countries likely fell 0.5% from January to February.
Finally, on Friday, industrial production figures for the 17-member eurozone as a whole are expected to show the output remained flat on a monthly basis in February. When compared to the year before, however, production likely declined by 2.5%.
China will dominate Asia’s economic calendar over the coming days. The world’s second largest economy will report last month’s inflation figures on Tuesday. Trade data will follow on Wednesday.
Economists expect that China’s consumer inflation rate eased last month after rising to a 10-month high in February. Food prices, which comprise a third of China’s consumer price index (CPI) basket, have fallen steadily since February’s Spring Festival. As a result, markets expect China’s CPI to have slowed to 2.5% year-on-year growth in March from 3.2% in February.
Producer prices fell by 1.6%, year on year, in both January and February. Markets expect a decline of comparable magnitude in March’s data.
China reported a surprise 21.8% year-on-year jump in exports in February. Imports dropped 15.2% over the same period, reducing the country’s trade surplus to $15.3-billion in February. Consensus is that an 11.7% rise in exports and 6% uptick in imports left the country’s trade surplus largely unchanged at $15.2-billion last month.
Chinese authorities are also expected to release money supply and new yuan lending data sometime between April 10 and April 15. M2 money supply growth is expected to slow slightly, from 15.2% year-on-year growth in February to 15.1% growth in March. New yuan lending could hit the one-trillion mark, according to the official China Securities Journal. Analysts responding to a recent Reuters’ survey were more cautious, estimating that total new loans from all Chinese banks would rise to ¥850-billion in March.
Monday is a busy day for data in Africa. South Africa will report last month’s gold and foreign exchange reserves. Ghana will release fourth quarter gross domestic product (GDP) and February’s gross reserves data. Namibia will release March’s foreign reserves and February’s M2 money supply figures. Kenya will release fourth quarter GDP figures and Uganda will report March’s foreign reserve holdings.
On Wednesday, Egypt and Ghana will report last month’s consumer inflation readings.
Egypt’s year-on-year inflation rate skyrocketed to 8.2% in February from 6.3% in January and 4.7% in December. Most analysts believe that CPI inflation will rise to double-digit levels within the next few months.
Ghana’s CPI increased to 10% in February from 8.8% in the previous month, after averaging 9.2% in 2012. March’s figures will be the first to reflect the Ghana Statistics Service’s revised CPI basket, based on the Ghana Living Standards Survey. Analysts expect CPI inflation to remain in double digits over the near term.
On Thursday, Statistics South Africa will release February’s mining and manufacturing figures.
South Africa’s manufacturing output rose by 3.9% in January from a year earlier, up from a 2% year-on-year increase in December. Amongst other factors, economists expect weak demand from Europe – South Africa’s largest market for manufactured products – to have weighed on output in February. Economists expect production to have risen 2%.
Elsewhere on the continent, Tanzania is expected to release fourth quarter GDP figures and Uganda to report M3 money supply data this week.
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