On Thursday, the Bank of England is widely expected to cut rates by 25bps to 5.00 percent, as tight credit conditions and a crumbling UK housing sector may prove to be frighteningly similar to the US.
Australian employment data is expected to show signs of deterioration during the month of March, as the net employment change is forecasted to rise by only 10,000, while the unemployment rate is anticipated to tick up to 4.1%.
While most central banks are in the process of cutting rates, the Reserve Bank of Australia has been on the other side of the coin as they’ve raised rates at two of the past three monetary policy meetings.
While the Canadian credit markets remain very tight and the Bank of Canada is expected to continue cutting rates, economic conditions in the first quarter of 2008 have actually proven to be rather resilient. Indeed, retail sales and business activity have rebounded from very weak levels in December as domestic demand remains robust. Why?
Conditions in US non-manufacturing sector – which accounts for approximately 70 percent of total economic activity in the country and includes retail, services, and finance – are anticipated to have deteriorated in March, as the Institute for Supply Management index is estimated to fall to 48.5 from 49.3.
On Wednesday, Federal Reserve Chairman Ben Bernanke will testify on the economic outlook before the Joint Economic Committee of Congress. Bernanke’s comments tend to spark volatility not only in the forex markets, but also in the equity and fixed income markets.
The Institute for Supply Management is expected to report that their survey of conditions in the manufacturing sector fell to a nearly five-year low of 47.5 in March from 48.3.
The Canadian economy has continued to remain resilient in the face of a U.S. and global slowdown, which the upcoming January GDP reading is expected to confirm. The monthly growth measurement is expected to have improved in January to 0.4% from -0.7% the month prior.
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