As corporate earnings season winds down and the release of April Fed minutes on Wednesday revealed that a number of Fed participants are open to an interest rate hike during the Fed’s June FOMC meeting, investors will shift their attention this week to a batch of new U.S. economic data for signs about the resiliency of the U.S. economy to weather an approaching interest rate hike.
Hawkish statements from the Fed’s April FOMC minutes released on Wednesday increased the probability of a rate hike in June and helped to push the euro to a 2 month low of 1.1207 against the U.S. dollar combined with new inflation data from Europe that showed falling inflation levels in the 19 member Euro area.
Weak April Euro area inflation data released last Wednesday helped to drive the euro lower versus the dollar and showed the Euro area Consumer Price index fell -0.2 percent in April after a flat 0.0 percent in March, increasing the chances of further ECB monetary easing despite its already aggressive monetary policy stance consisting of negative rates and quantitative easing.
The Week Ahead- U.S. economic data
This week investors will be paying close attention to new home sales in the for April released on Tuesday, U.S. durable orders and U.S. pending home sales for April reported on Thursday, and a second estimate of Q1 2016 GDP data on Friday.
Economists from briefing.com have a consensus estimate of 521,000 new home sales in April following 511,000 new home sales in March.
Durable orders on Thursday are expected to show an increase of 0.6 percent in April, below the 0.8 percent expansion in March, according to consensus estimates from briefing.com.
The second reading of 1Q 2016 GDP released on Friday is expected to show the U.S. economy grew at a pace of 0.9 percent, according to consensus estimates from briefing.com which comes on the heels of the 1st GDP estimate that showed the first 1Q 2016 GDP rose 0.5 percent.
Two Fed members, San Francisco Fed President John Williams and St. Louis Fed President James Bullard will give speeches on Monday.
On Friday Fed Chair Janet Yellen will be presented with the Radcliffe Medal at Harvard which will feature reflections from former Fed Chair Ben Bernanke and Gregory Mankiw, Professor of Economic at Harvard University, will engage Yellen in conversation about her past achievements.
Full U.S. Economic Calendar
Tuesday- New Home Sales (April)
Wednesday- MBA Mortgage Index, Crude Inventories, FHFA Housing Price Index (March), International Trade in Goods- Advanced reading (April)
Thursday- Durable Orders (April), Pending Home Sales (April), Initial and Continuing Claims, Natural Gas Inventories
Friday- 2nd estimate of 1Q 2016 GDP, Michigan Sentiment (May)