“Key Financial Events of the Week: Technology Stocks’ Earnings, US PCE Inflation, Q1 GDP & BOJ Policies”

This week’s key international financial events include: some of the leading US technology stocks will announce their earnings, the Fed’s preferred inflation indicator – the US personal consumption expenditures (PCE) price index in March, and the US domestic production in the first quarter gross (GDP). In addition, Kazuo Ueda, newly appointed Governor of the Bank of Japan (BOJ), will hold its first policy-making meeting.

This week’s trading notes (0424-0428)

1. Heavyweight technology stocks earnings week

The highlight of the U.S. Q1 financial reporting season will debut, and three of the four largest companies in the U.S. stock market—Microsoft (MSFT-US)、Alphabet(GOOGL-US), Amazon (AMZN-US)—the financial report will be announced, in addition, Meta(META-US) will also announce last quarter results.

Big technology and growth stocks have made a broad recovery this year after a sell-off last year, citing lower U.S. bond yields and investors viewing the companies as big players with safe balance sheets following turmoil in the banking sector. Their earnings reports will test whether the follow-up rally in US stocks can continue.

As the turmoil in the banking industry gradually subsided, a number of banks announced their financial reports this week, including First Republic Bank (FRC-US), Credit Suisse (CS-US), and UBS, which hastily bought Credit Suisse (UBS-US). Deutsche Bank (DB-US), Barclays Bank (BCS-US) will also announce performance.

2. U.S. PCE inflation in March, U.S. Q1 GDP,

Federal Reserve (Fed) officials entered a quiet period before the policy meeting this week, making the market more focused on economic data, this week will release the PCE price index for March, the last before the Fed’s May 2-3 meeting. One of the heavyweight reports.

The annual growth rate of core consumer price index (CPI) in March in the United States released last week rose slightly to 5.6%, although the monthly growth rate fell slightly to 0.4%, but both are still hot. If PCE inflation is also unexpectedly strong, it may affect the Fed’s actions towards the hawkish tilt.

The US will also release preliminary first-quarter gross domestic product (GDP), which is currently expected to grow by 2%.If the GDP is lower than market expectations, the market’s expectations of the Fed’s interest rate cut before the end of the year will cool down, and the US dollar may be sold.gold。

3. Bank of Japan’s April monetary decision

Kazuo Ueda took over as president of the Bank of Japan on April 9 and will host his first monetary policy meeting this Friday. Although the market generally expects that the Bank of Japan will continue the current extremely dovish monetary policy, that is, maintain negative interest rates and yield fluctuations, But some economists reminded not to ignore the possibility of unexpected news breaking out again.

Kazuo Ueda has repeatedly reiterated in recent weeks that the current monetary stimulus is still appropriate. Japanese business circles want the new president to focus on maintaining market stability rather than pushing policy changes, a Reuters poll showed.

The BOJ is likely to maintain dovish policy guidance while discussing changing the language on the impact of the Covid-19 outbreak in future meetings, the sources said.

The BOJ is gradually coming to terms with the idea of ​​changing its yield curve control (YCC) policy later this year, even if it stands on hold next week, and is now waiting for more evidence of sustained wage growth, the sources added.