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A quiet-ish week lies ahead for some markets, with a couple of central banks meeting: the Bank of England, which meets later in the week, and the Reserve Bank here today and tomorrow.

No rate change is forecast from the RBA, but some stern threats on possible rate rises are likely in the post-meeting statement and the briefing from Governor Michelle Bullock that are the focal points.

There are also a couple of local half-year bank profits—Westpac (today) and ANZ tomorrow. Both are likely to be similar to last week’s OK result from NAB.

Of course, they will be just as interested in the RBA meeting and commentary as they will be in their results—the latter are driven by the RBA’s rate decisions.

AMP chief economist Shane Oliver says the central bank "is expected to leave the cash rate on hold at 4.35% and is likely to signal a return to a mild tightening bias after moving to a neutral bias ('not ruling anything in or out') at its March meeting.”

He says the return to a tightening bias could be similar to the wording the RBA used in February that a further rise in rates “cannot be ruled out.”

He thinks the RBA "is likely to consider another rate hike, particularly on the back of a likely slight upwards revision to its forecast for underlying inflation for this year to around 3.3% yoy from 3.1%.”

But with "retail sales and household spending data indicating the consumer remains under pressure and that rate hikes are continuing to work to cool demand, and given the danger of overreacting to the inflation data, it’s likely to sit tight and rely on the jawboning of warning that it may have to raise rates again.

"With inflation continuing to fall and given the consecutive quarterly pattern of upside followed by downside surprises on inflation that we have been seeing, our view remains that moving to hike rates again would be an unnecessary overreaction to the poor March quarter inflation data.

"We continue to see the RBA starting an easing cycle this year but have pushed out the first rate cut to year-end,” Oliver wrote at the weekend.

The Bank of England on Thursday is expected to leave its key policy rate on hold at 5.25%, with the possibility of a further dovish tweak in forward guidance. Markets are pricing in the first cut for around August.

China’s April trade data on Thursday is likely to show stronger exports and imports, but Saturday’s inflation data will likely show flat consumer prices and continued deflation in producer prices.

There’s the fallout from the Panamanian election on Sunday, which will be big news for the global copper markets and producers and processors—especially in China.

And in the US, a quiet week but the March quarter reporting season continues, though at a slower pace.

56 S&P 500 companies (including one Dow 30 member) are scheduled to report their first-quarter figures. That’s a third of companies that reported last week. A number of media companies are due to report—the two Murdoch family-dominated groups, Fox Corporation and News Corp, and The New York Times Co as well.

Disney also reports its quarterly and could reveal the huge cost for the bruising proxy fight ahead of the annual meeting late in the quarter.

Outside the US, there are some majors reporting—a trio of Japanese carmakers, led by Toyota, as well as Honda and Nissan. German car giants Daimler and BMW will also report, so there will be a good guide to how the car sector has started the year.

Oil major BP is due to report, as is Swiss banking giant UBS.

US financial data group FactSet says that with 80% of the S&P 500 companies reporting actual results for Q1 2024 to date.

"Of these companies, 77% have reported actual EPS above estimates, which is equal to the 5-year average of 77% but above the 10-year average of 74%.”

"In aggregate, companies are reporting earnings that are 7.5% above estimates, which is also below the 5-year average of 8.5% but above the 10-year average of 6.7%.

"Eight of the eleven sectors are reporting year-over-year earnings growth, led by the Communication Services, Utilities, Consumer Discretionary, and Information Technology sectors. On the other hand, three sectors are reporting a year-over-year decline in earnings: Energy, Health Care, and Materials,” FactSet said on Friday.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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