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Trading Radar: Economic Data Should Contribute to a Volatile Week


Economics, earnings reports, and market events for the week ahead.

There are four events next week that could generate considerable volatility in all markets: the March releases of the ADP private payrolls report, the nonfarm payrolls report, the ISM manufacturing index, and the monthly ECB meeting. 

Next Tuesday's ISM manufacturing index will get the week going with a bang. Regional manufacturing surveys for March, up to this point, have had an upbeat nature, which implies that producers are shaking off the weather-related slowdown and ramping up production.

Next Friday's nonfarm payrolls report should cause the most market volatility in the week, and investors have already begun positioning their portfolios for the release. Many market participants believe that due to an increase in tax withholding and a drop in jobless claims over the last month, the government employment report will be much stronger than expected. The number of nonfarm jobs added to the economy in the first two months of the year were 129,000 and 175,000, respectively -- both below the average 204,000 added jobs per month in 2013. The thinking is that March could make up for the shortfall in those months. Economists expect nonfarm payrolls to grow by 197,000 jobs in March. Investors will also be keeping an eye on wage growth after last month's figures showed a pickup in the annual growth rate, which was largely attributable to a substantial decline in hours worked.

Next Wednesday's ADP private payrolls report will preview the government report on Friday.

The ECB will release its monthly monetary policy decision next Thursday at 7:45 a.m. EDT, and President Mario Draghi will hold his usual press conference 45 minutes later. Recently, four ECB Governing Council members have broached the idea of implementing a negative deposit rate -- meaning the central bank would charge banks to hold its deposits overnight -- but the odds of such an event happening are extremely low. In preparation for this decision, European equities have begun rallying, and the EURUSD currency pair has begun declining as investors position for dovish moves by the central bank. The general expectation is that to tackle persistently low inflation -- and a rising currency, the root cause of low inflation -- the ECB may even begin buying government bonds, following a precedent set by the US Fed and Bank of Japan.

More economic data is due out from China next week in the form of March manufacturing PMIs. In the past week, the preliminary March manufacturing PMI from Markit failed to show an increased rate of growth. However, Chinese stocks rallied strongly in the week on speculation that the government would enact fiscal stimulus to arrest deceleration in the country's growth.

The earnings calendar remains very light, as most major companies will not report their first quarter until April 8. Apollo Education Group (NASDAQ:APOL), Monsanto (NYSE:MON), and Micron Tech (NASDAQ:MU) are the only notable companies scheduled to report next week.

Monday, March 31

US Economics (Time Zone: EST)

09:00 ISM Milwaukee - expected 51.00, prior 48.59
09:45 Chicago PMI - exp 59.0, prior 59.8
10:30 Dallas Fed - exp 3.0, prior 0.3
11:00 Fed to purchase $500m-$750m notes in 11 to 20-year range
11:30 Treasury selling $25b 3-month, $23b 6-month bills
09:55 Yellen (dove, chair) speaks at Development Conference in Chicago on banking

Global Economics (Time Zone: GMT)

JPY Industrial Production (Feb preliminary)
05:00 JPY Housing Starts
06:45 French GDP (4Q final)
08:30 GBP Net Consumer Credit
09:00 EUR Eurozone CPI (March advance)
12:30 CAD GDP (Jan)

Tribune Co (TRBAA)

Tuesday, April 1

US Economics (Time Zone: EST)
09:45 Markit US Manufacturing PMI Final - expected 56.0, prior 55.5
10:00 ISM Manufacturing - exp 54.0, prior 53.2
10:00 ISM Prices Paid - exp 59.0, prior 60.0
10:00 Construction Spending MoM - exp 0.1%, prior 0.1%
5:00 Total Vehicle Sales - exp 15.80M, prior 15.27M
5:00 Domestic Vehicle Sales - exp 12.35M, prior 11.98M
11:00 Fed to purchase $1b-$1.25b notes in 22 to 30-year range
11:30 Treasury selling $25b 52-week bills, 4-week bills

Global Economics (Time Zone: GMT)

JPY Tankan Manufacturer Index, Outlook
01:00 CNY Manufacturing PMI
01:45 CNY HSBC/Markit Manufacturing PMI
03:30 AUD RBA Rate Decision
06:30 INR Reserve Bank of India Rate Decision
07:55 EUR German Employment Change
08:00 EUR Eurozone Manufacturing PMI (Mar final)
08:30 GBP Manufacturing PMI
09:00 EUR Eurozone Unemployment Rate


Apollo Education Group (APOL)

Wednesday, April 2

US Economics (Time Zone: EST)

07:00 MBA Mortgage Applications
08:15 ADP Private Payrolls (Mar) - expected 190K, prior 139K
10:00 Factory Orders (Feb) - exp 1.2%, prior -0.7%
11:00 Fed to purchase $2.25b-$2.75b notes in 7.5-10-year range
12:30pm Lockhart (hawk, nonvoter) speaks in Miami
4:00pm Bullard (moderate, nonvoter) meets reporters in St. Louis

Global Economics (Time Zone: GMT)

JPY Monetary Base end of March
06:00 GBP Nationwide Home Price Index


Monsanto (MON)

Thursday, April 3

US Economics (Time Zone: EST)

07:30 Challenger Job Cuts YoY
08:30 Initial Jobless Claims - expected 319K, prior 311K
08:30 Continuing Claims - exp 2850K, prior 2823K
08:30 Trade Balance (Feb) - exp -$38.5B, prior -$39.1B
11:00 Fed buying $3.75b-$4.5b bonds in 4 to 5-year range
Global Economics (Time Zone: GMT)

JPY Japan Investors Purchases of Foreign Bonds/Stocks
00:30 AUD Retail Sales
01:00 CNY Non-manufacturing PMI
01:45 CNY HSBC/Markit Services PMI
08:30 EUR Eurozone Services PMI
08:30 GBP Services PMI
09:00 EUR Eurozone Retail Sales
11:45 EUR ECB Rate Decision


Micron Tech (MU)

Friday, April 4

US Economics (Time Zone: EST)

08:30 Nonfarm Payrolls - expected 199K, prior 175K
08:30 Private Payrolls - exp 193K, prior 162K
08:30 Manufacturing Payrolls - exp 5K, prior 6K
08:30 Unemployment Rate - 6.6%, prior 6.7%
08:30 Average Hourly Earnings YoY - exp 2.3%, prior 2.2%
08:30 Average Weekly Hours - exp 34.4, prior 34.2
11:00 Fed buying $1b-$1.25b bonds in 22 to 30-year range
Global Economics (Time Zone: GMT)

10:00 EUR German Factory Orders
12:30 CAD Employment Change


No major reports scheduled

Twitter: @MichaelSedacca

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