European stock market little changed at the open today
It’s expected to be a quiet week ahead, as is usually the case following the NFP report.
On Tuesday, Australia will release the Westpac consumer confidence and NAB business confidence data.
On Wednesday, the spotlight will be on New Zealand, with the RBNZ monetary policy announcement. In the U.S., attention will turn to the release of the FOMC meeting minutes.
Thursday will bring the U.S. inflation data alongside the weekly unemployment claims.
Finally, on Friday, the U.K. will publish its monthly GDP print, while the U.S. will release the PPI m/m, along with preliminary readings for the University of Michigan’s consumer sentiment and inflation expectations.
Several FOMC members are also expected to make public remarks throughout the week.
Consumer confidence in Australia rose by 4% in March, which may be attributed to the improved labor market outlook and the RBA’s decision to cut interest rates in February. The cost of living pressures have also eased. However, the April survey will be influenced by the RBA keeping rates on hold this month and the developments surrounding U.S. tariffs and their impact on the financial markets.
At this week’s meeting, the RBNZ is expected to deliver a 25 bps rate cut, bringing the OCR down to 3.50%. Recently, inflation in New Zealand has started to ease, although GDP came in above expectations.
Uncertainty surrounding U.S. tariffs is also expected to weigh on the economic outlook. According to analysts at Westpac, the RBNZ is likely to maintain an easing bias, given the perception that the OCR remains above the neutral rate.
The market will look at whether the central bank signals a greater reliance on incoming data to guide future decisions, potentially marking a shift away from the previous forward guidance. Westpac also emphasized that keeping the OCR at its current level may become a bigger possibility in upcoming meetings.
In the U.S., the consensus for the core CPI m/m is 0.3% versus the prior 0.2%; for CPI m/m, it’s 0.1% versus 0.2%; and the y/y CPI is expected to decline from 2.8% to 2.6%.
The decline in energy goods prices is expected to be reflected both in the monthly and the headline CPI figures. Although inflation in the U.S. has begun to cool, it remains above the Fed’s target and the prospect of higher tariffs complicates efforts to bring inflation down further.
The previous revision for consumer sentiment dropped to 57.0, marking the lowest level since 2022, when inflation data was running hot. For this week, the consensus is for a further decline to 54.0.
Analysts from Wells Fargo note that sentiment levels are now among the lowest recorded in over four decades, surpassed only during the depths of the global financial crisis and the peak of the inflation surge in 2022.
Rising inflation expectations are heavily weighing on consumer sentiment. One-year inflation expectations jumped to 5.0% in March from 3.3% in January, while long-term expectations rose to 4.1%, a level not seen since 1993.
As a result, household finance expectations fell sharply, with the index dropping to a record low of 86.0. The deterioration in sentiment was broad-based, cutting across political lines. With ongoing tariff headlines overlapping the survey period, there are few signs that consumer confidence could rebound.
