Week Ahead 31 March – 4 April

WEEK IN REVIEW

The Bank of Portugal revised upwards its forecasts on the back of better-than-expected Q4 data and a slightly more positive outlook for the economy. The new forecast points to GDP growth of 1.2% in 2014 and 1.4% in 2015. Most of 2014 growth will be due to a recovery in domestic demand particularly in investment. Net exports should have a negligible impact as imports are likely to rise after two years of declines. The EU Commission’s sentiment indicator for Portugal rose in March and is now only one point short of its long term average. The rise was broad-based across all sectors including in Construction.

In Angola, the Private Investment Agency ANIP reported that just over 13% of foreign investment projects were directed to the non-oil sector. The Government is currently reviewing the private investment law to increase FDI.

Elsewhere in the world, the Euro area composite PMI declined from 53.3 to 53.2, in line with markets’ expectations, and still signalling the recovery is ongoing. The Bundesbank’s opposition to asset purchases declined somewhat, opening the way for further ECB quantitative easing, if considered necessary. The EU Commission Economic Sentiment Indicator rose to about two points above its long-term average on the back of an improvement in Consumers’ sentiment.

WEEK AHEAD

1 April:

  • February Euro area unemployment rate: The unemployment rate currently stands at 12%. Further declines are likely to be very gradual, given the moderate economic recovery
  • March US ISM indicator: Markets expect the indicator to rise to above 56 after 55.5, signalling strengthening growth in the US. A value above 50 indicates an expansion

3 April

  • ECB rate setting meeting: no action on rates but wording may soften on asset purchases now that Bundesbank’s opposition is declining

4 April

  • US Non-farm payrolls: worldwide watched indicator that gauges the pace of economic recovery in the US. Markets expect 190 thousand rise in employment