Week ahead: US retail sales, Walmart earnings

The key question being answered this week is how strong the US consumer remains in the face of persistently high inflation. US retail sales data and earnings updates from bellwethers Home Depot and Walmart are among the highlights.

Here are the week’s key events:

Monday

Factory activity in the New York Fed’s district offers the main economic data. The Empire Fed manufacturing index jumped to 10.8 in April from –24.6 in March (easily beating expectations), whilst the prices component ticked up also. Earlier in the Asian session traders will watch for PPI inflation data from Japan, followed by EU economic forecasts and Eurozone industrial production figures. Bank of England governor Bailey and other MPC members are tentatively scheduled to testify on inflation and the economic outlook before Parliament's Treasury Committee, but these events are often rescheduled.

Tuesday

After surprising markets with a 25bps hike last time out, the RBA’s monetary policy meeting minutes will be parsed for clues about what might come next from the Australian central bank. UK employment data and German economic sentiment data follow. The big event is the US retail sales data, the gut check of the US consumer further augmented by earnings from Home Depot, which come ahead of the opening bell. Canadian CPI inflation data is also due with traders paying close attention after the Bank of Canada recently said it would further hike rates should inflation get stuck above 2%.

Earnings: The Home Depot (HD)

Wednesday

Australian wage data and some preliminary GDP figure out of Japan are among the early highlights in a pretty quiet day for data. Eurozone final CPI inflation, US building permits and housing starts, and weekly crude oil inventory data are due later on. Cisco tops the earnings bill having raised its full-year guidance in February despite supply chain constraints still being a factor. Management guided fiscal third-quarter adjusted earnings of 96 cents to 98 cents per share and 11% to 13% revenue growth.

Earnings: Cisco Systems (CSCO), Take-Two Interactive Software (TTWO)

Thursday

Ascension Day holidays in Europe may keep trading thinner than usual. Ahead of that, Australian employment numbers and the New Zealand budget will drive the Asian session. Watch for BOE and ECB economic bulletins, before the main event in the US – weekly unemployment claims data, existing home sales and the Philly Fed manufacturing index. US consumer gut check volume II comes with Walmart earnings.

Earnings: Walmart (WMT), Apple Materials (AMAT)

Friday

Slow day for markets in terms of data but UK consumer confidence and Japan national core CPI inflation will be watched ahead of the start of G7 meetings. The US Treasury is tentatively scheduled to publish its currency report on the Saturday.

Earnings: Deere & Co (DE)