"Blockbuster Week" Preview: Fed, ECB, BOJ On Deck, Earnings Avalanche, GDP, PCE

"Blockbuster Week" Preview: Fed, ECB, BOJ On Deck, Earnings Avalanche, GDP, PCE Tomorrow marks exactly two months since the strikes on Iran began. As DB's Jim Reid writes, while there is currently a rolling, open ended ceasefire that started on 8 April, the risk of it collapsing at any point remains real. Just as the weekend news looked like it was leaning negatively though, last night reports came through that Iran have offered the US a fresh proposal to reopen the strait and end the war. However as Axios and others reported, this proposal postpones talks on nuclear capabilities. So it’s unclear whether the US Administration would tolerate that but for now the market is trading better than it might have done to start the week. This fresh development follows President Trump cancelling a planned visit to Islamabad by envoys Kushner and Witkoff, saying that the Iranians had “offered a lot, but not enough.” Iranian President Pezeshkian, meanwhile, said Iran would not agree to “imposed negotiations under threats or blockade.” The coming week will no doubt bring further developments, though predicting them is close to impossible. When the conflict began more than eight weeks ago, Reid - and many others - expected it to be comfortably over by now, with markets having followed the usual playbook and fully recovered. The market reaction has largely played out, but for the wrong reasons: the conflict is not over. That said, markets still appear to price in a meaningful chance that it will be resolved relatively soon. Polymarket, for example, suggests a 56% probability of traffic returning to normal by 30 June, although this briefly reached 91% ten days ago when it appeared that Iran was reopening the Strait. In other news, one notable development yesterday was Senator Thom Tillis’s decision to lift his block on Kevin Warsh’s nomination to chair the Fed. Tillis said he was satisfied with the Department of Justice’s decision late last week to drop its investigation into the Fed refurbishment. There had been some concern on Saturday that the DLooking ahead, with central bank meetings for every G7 country this week - alongside 42% of the S&P 500 reporting by market capitalisation, including five of the Mag 7 - it is shaping up to be a blockbuster weekoJ had left the door open to reopening the probe at a later stage, which might not have been sufficient to clear the way. However, Tillis indicated that he had received assurances that gave him enough comfort to remove his block. In terms of overnight markets, Brent crude is up +1.22%, marking the sixth consecutive session of gains, trading at $106.61 per barrel, following the weekend news. However regional equities are strong with the KOSPI (+2.57%) now at +57.6% YTD, largely on the back of two stocks: Samsung and SK Hynix. The Nikkei (+1.88%) is also strong. Other markets are a bit more subdued with the Hang Seng (+0.15%), the CSI (+0.21%), and the Shanghai Composite (+0.15%) slightly higher but with the S&P/ASX 200 (-0.14%) dipping.  Looking ahead, with central bank meetings for every G7 country this week - alongside 42% of the S&P 500 reporting by market capitalisation, including five of the Mag 7 - it is shaping up to be a blockbuster week, even before factoring in ongoing Iranian war newsflow. The Bank of Japan meets tomorrow, followed by the Fed and the Bank of Canada on Wednesday. Thursday then brings decisions from the ECB and the Bank of England. All are expected to remain on hold, but the key question will be how each central bank’s reaction function is shaped by the conflict and the associated stagflation risks.  From an earnings perspective, 22% of S&P 500 market capitalization — across just four companies — reports after the close on Wednesday, when Alphabet, Microsoft, Amazon and Meta release their Q1 results. Apple follows on Thursday. Source: Earnings Whispers Turning to the Fed meeting mid week, Deutsche Bank economists’ base case is that any meaningful change in guidance is deferred until June, since this is Powell's last meeting. That said, there is a tangible risk that communication skews modestly hawkish — either through subtle language tweaks around “additional policy adjustments” or via Chair Powell signalling a more symmetrical assessment of risks to the dual mandate. An explicit acknowledgement that risks to price stability and employment are now more evenly balanced would likely be interpreted as a marginally less accommodative stance. Geopolitics will loom large in Powell’s press conference, given developments in the Middle East. With uncertainty still elevated, Powell is likely to emphasise that policymakers cannot yet assess the precise implications for growth or inflation. However, he may also note that persistently high oil prices raise the risk of inflation becoming more entrenched over time. Overall, the tone should be consistent with a Fed prepared to remain on the sidelines for a while longer. Alongside the meeting, Thursday’s personal income and spending report — and particularly core PCE — will be equally important. Income is expected to rebound by 0.6% after a 0.1% decline, while consumption is forecast to rise 0.5%. DB expects the core PCE deflator to increase by 0.25% month on month, lifting the year on year rate to around 3.13%. If realised, Q1 core PCE inflation will average just above 3.0%, marking five years since the Fed’s preferred underlying inflation gauge last ran at or below its 2% target. Our latest projections see core CPI and core PCE at 2.7% and 2.9% respectively by Q4 2026, highlighting how recent energy related shocks continue to complicate the path back to target. Other data ahead of the meeting are unlikely to materially alter the Fed’s decision. Consumer confidence tomorrow is expected to fall to 88.8 from 91.9, reflecting heightened geopolitical concerns. More important than the headline will be the “jobs plentiful” and “jobs hard to get” components, which historically track movements in the unemployment rate and offer insight into perceived labour market momentum. Wednesday brings a cluster of releases that will refine expectations for Thursday’s advance Q1 GDP estimate. Housing starts are forecast to rise to 1.425 million from 1.35 million, with permits edging up to 1.390 million. Durable goods orders are expected to fall 0.4% for the headline, but ex transportation and core orders are projected to rise 0.5%, pointing to continued strength in capital investment. Together with the advance goods trade balance, these data frame our economists’ 2.8% annualised forecast for Q1 real GDP — a sharp rebound from 0.5% in Q4. Thursday’s data batch is the most consequential of the week, even beyond core PCE. While DB still expects 2.8% inflation adjusted growth for Q1 GDP, the composition has shifted meaningfully. Consumer spending is forecast to contribute 1.2pp, down from 1.9pp in Q4, while non residential fixed investment accelerates sharply to 7.5%. Final sales to private domestic purchasers — our preferred measure of underlying demand — are projected to edge up to 2.0%. Risks to the headline GDP number appear broadly balanced, particularly given volatility in trade flows. Elsewhere on Thursday we see the employment cost index and the Chicago PMI. Friday kicks off May with the ISM manufacturing index and vehicle sales. While business surveys may not yet fully reflect recent war developments, they should provide early signals on whether firms share markets’ confidence that the conflict will have limited and temporary economic effects. Last week’s flash PMI suggested US businesses remain far more confident on this front than their European counterparts. In Europe, attention turns to preliminary April CPI prints, with Germany and Spain reporting first on Wednesday and the broader euro area numbers on Thursday, alongside advance Q1 GDP. Ahead of that, Tuesday brings the ECB’s consumer expectations and bank lending surveys. In Japan, key releases include April Tokyo CPI on Friday and March activity data on Thursday, while China sees its official April PMIs on Thursday, following industrial profits for March earlier in the week. As usual, the full day by day calendar appears at the end. Courtesy of DB, here is a day-by-day calendar of events Monday April 27 Data: US April Dallas Fed manufacturing activity, China March industrial profits, Germany May GfK consumer confidence Earnings: Verizon, Hitachi, Advantest, Cadence Design Systems, Deutsche Boerse Auctions: US 2-yr Notes ($69bn), 5-yr Notes ($70bn) Tuesday April 28 Data: US April Conference Board consumer confidence index, Richmond Fed manufacturing index, business conditions, Dallas Fed services activity, February FHFA house price index, Japan March jobless rate, job-to-applicant ratio, Italy March PPI, February industrial sales Central banks: BoJ decision, ECB consumer expectations survey, bank lending survey Earnings: Visa, Coca-Cola, Novartis, T-Mobile US, Airbus, Welltower, Corning, Booking, S&P Global, BP, Starbucks, Spotify, Atlas Copco, UPS, Sherwin-Williams, Barclays, Ecolab, Hilton, Robinhood Markets, Mondelez, Vale, General Motors, Teradyne, NXP Semiconductors, Sysco, Kimberly-Clark Auctions: US 2-yr FRN ($30bn), 7-yr Notes ($44bn) Wednesday April 29 Data: US March durable goods orders, building permits, housing starts, advance goods trade balance, retail inventories, wholesale inventories, Germany April CPI, Italy April economic sentiment, March hourly wages, Eurozone March M3, April economic confidence, Australia March CPI, Sweden March GDP indicator Central banks: Fed’s decision, BoC’s decision Earnings: Alphabet, Microsoft, Amazon, Meta, AbbVie, AstraZeneca, KLA, TotalEnergies, Amphenol, Banco Santander, Iberdrola, Qualcomm, UBS, GSK, Equinix, Carvana, Automatic Data Processing, Lloyds, DSV, Mercedes-Benz, Ford, Old Dominion Freight Line, eBay, Porsche, Universal Music Group, Haleon, adidas, Verisk Analytics Thursday April 30 Data: US Q1 GDP, employment cost index, March PCE, personal income, spending, leading index, April MNI Chicago PMI, initial jobless claims, China April PMIs, UK April Lloyds Business Barometer, Japan March retail sales, industrial production, housing starts, April consumer confidence index, Germany April unemployment claims rate, Q1 GDP, March retail sales, import price index, France Q1 GDP, private sector payrolls, April CPI, March PPI, consumer spending, Italy Q1 GDP, April CPI, March unemployment rate, Eurozone Q1 GDP, April CPI, March unemployment rate, Canada February GDP Central banks: ECB’s decision, BoE’s decision Earnings: Apple, Samsung Electronics, Eli Lilly, Mastercard, Caterpillar, Merck & Co, Amgen, ConocoPhillips, Sandisk, Western Digital, Tokyo Electron, DBS, Stryker, BBVA, Parker-Hannifin, Bristol-Myers Squibb, BNP Paribas, Altria, Agnico Eagle Mines, ING, CRH, Royal Caribbean Cruises, L3Harris Technologies, Societe Generale, Credit Agricole, BASF, Standard Chartered, Volkswagen, Hershey, Reddit, Stellantis, Blue Owl, Nemetschek, Puma Friday May 1 Data: US April ISM index, total vehicle sales, UK March net consumer credit, March M4, Japan April Tokyo CPI, Canada April manufacturing PMI Central banks: BoE’s Pill speaks Earnings: Exxon Mobil, Chevron, Linde, Colgate-Palmolive, NatWest, Ares, Estee Lauder, TPG * * *  Finally, looking at just the US, Goldman writes that the key economic data releases this week are the employment cost index, advance Q1 GDP, and core PCE reports on Thursday. The April FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM. Monday, April 27  There are no major data releases scheduled. Tuesday, April 28  09:00 AM S&P Case-Shiller 20-city home price index, February (GS +0.1%, consensus +0.2%, last +0.2%); We estimate that the Case-Shiller home price index increased only +0.1% in February, reflecting the sequentially weaker signal from higher frequency measures of home prices. 09:00 AM FHFA house price index, February (consensus +0.1%, last +0.1%) 10:00 AM Conference Board consumer confidence, April (GS 88.5, consensus 89.0, last 91.8) Wednesday, April 29  08:30 AM Durable goods orders, March preliminary (GS +3.0%, consensus +0.5%, last -1.3%); Durable goods orders ex-transportation, March preliminary (GS +0.4%, consensus +0.4%, last +0.9%); Core capital goods orders, March preliminary (GS +0.4%, consensus +0.5%, last +0.7%); Core capital goods shipments, March preliminary (GS +0.6%, consensus +0.8%, last +1.0%): We estimate that durable goods orders increased 3% in the preliminary March report (month-over-month, seasonally adjusted), reflecting a rebound in commercial aircraft orders. We forecast a 0.4% increase in core capital goods orders—reflecting the continued increase in the new orders components in manufacturing surveys but payback for an outsized increase in the series itself in February—and a 0.6% increase in core capital goods shipments—reflecting the continued increase in core capital goods orders in recent months. 08:30 AM Advance goods trade balance, March (GS -$88.5bn, consensus -$86.8bn, last -$83.5bn): We forecast that the goods trade deficit widened by $5.0bn to $88.5bn in March, reflecting a decline in gold exports and a continued increase in AI-related imports. 08:30 AM Housing starts, March (GS 1,385k, consensus 1,400k, last 1,487k [January]); Building permits, March (consensus 1,390k, last 1,386k [January]): Census will jointly release housing starts and building permits data for the months of February and March. We forecast that housing starts declined to a seasonally adjusted annualized rate of 1,385k in March, reflecting reversion toward the level of permits following a jump in January starts driven by the more volatile multifamily category; a continued decline in homebuilder sentiment; and the potential lagged impact of poor weather in late January and February. 02:00 PM FOMC statement, April 28-29 meeting: As discussed in our FOMC preview, we expect the FOMC to leave the funds rate unchanged at 3.50–3.75%. We only expect Governor Miran to dissent in favor of a 25bp cut. The FOMC is likely to reiterate its wait-and-see message because the war with Iran continues to cloud the economic outlook and to present risks to both inflation and activity. The Committee’s post-meeting statement is likely to acknowledge the better labor market news and higher inflation numbers but to leave the standing policy guidance unchanged.  Thursday, April 30  08:30 AM GDP, Q1 advance (GS +3.3%, consensus +2.2%, last +0.5%); Personal consumption, Q1 advance (GS +1.1%, consensus +1.5%, last +1.9%); Core PCE inflation, Q1 advance (GS +4.04%, consensus +4.1%, last +2.7%): We estimate that GDP rose 3.3% annualized in the advance reading for Q1, following a +0.5% annualized increase in Q4. Our forecast reflects a large boost to federal government spending (+22.5%, quarter-over-quarter annualized) from the end of the government shutdown worth +1.3pp on Q1 GDP. We expect a deceleration in both consumption (+1.1% vs. +1.9% in Q4) and residential investment (-4.8% vs. -1.7% in Q4) growth. We estimate that private domestic final sales rose 2.1% in Q1. We estimate that the core PCE price index increased 4.04% annualized (or 3.04% year-over-year) in Q1. 08:30 AM Personal income, March (GS +0.4%, consensus +0.3%, last -0.1%); Personal spending, March (GS +0.9%, consensus +0.9%, last +0.5%); Core PCE price index, March (GS +0.27%, consensus +0.3%, last +0.4%); Core PCE price index (YoY), March (GS +3.15%, consensus +3.2%, last +3.0%); PCE price index, March (GS +0.64%, consensus +0.7%, last +0.4%); PCE price index (YoY), March (GS +3.45%, consensus +3.5%, last +2.8%): We estimate that personal income and spending increased by 0.4% and 0.9%, respectively, in March. We estimate that the core PCE price index rose 0.27% in March, corresponding to a year-over-year rate of +3.15%. Additionally, we estimate that the headline PCE price index increased 0.64% in March, or increased 3.45% from a year earlier. 08:30 AM Employment cost index, Q1 (GS +0.8%, consensus +0.8%, last +0.7%): We estimate the employment cost index rose by 0.8% in Q1 (quarter-over-quarter, seasonally adjusted). Our forecast would result in a 0.1pp decline in the year-on-year rate to 3.3% (year-over-year, not seasonally adjusted), which would mark the slowest pace of yearly wage growth since 2021Q2. Our forecast reflects a roughly unchanged quarterly pace of wage and salary growth—reflecting the signals from the Atlanta Fed’s wage tracker and average hourly earnings—but a slight rebound in ECI benefit growth—reflecting the impact of start-of-the-year benefit resets. 08:30 AM Initial jobless claims, week ended April 25 (GS 205k, consensus 212k, last 214k): Continuing jobless claims, week ended April 18 (consensus 1,815k, last 1,820k) Friday, May 1  09:45 AM S&P Global US manufacturing PMI, April final (consensus 54.0, last 54.0) 10:00 AM ISM manufacturing index, April (GS 53.5, consensus 53.1, last 52.7): We estimate that the ISM manufacturing index increased by 0.8pt to 53.5 in April, reflecting improvement in regional manufacturing surveys—our manufacturing survey tracker increased by 1.2pt to 54.6—but a headwind from potential residual seasonality—the ISM manufacturing index has declined in eight of the last nine Aprils. 05:00 PM Lightweight motor vehicle sales, April (GS 16.0mn, consensus 16.0mn, last 16.3mn) Source: DB, Goldman Tyler Durden Mon, 04/27/2026 - 10:20