Nicholas Glinsman | April 24th, 2022

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April 24th, 2022

A free look at some brief thoughts about the week ahead, along with highlights from the past week’s subscription issues of Ahead of the Herd.

Normally, I start off with the upcoming data releases globally for a look at the week ahead. However, this week, given the stock market performance last week, I thought I would start with the excerpt from Friday’s Ahead of the Herd, which garnered a significant amount of client response, and even requests from non-clients. It remains very relevant looking ahead. This will be followed by the week ahead, and then excerpts from my main column for Monday through Thursday.

An ominous feature of yesterday’s S&P 500 price action? – April 22


The US and the euro area are scheduled to provide quarterly growth readings in the coming week for the start of 2022, an early indication of how Russia’s war in Ukraine has affected two of the largest regions of the global economy.

US GDP growth probably slowed sharply to an annualized rate of 1% that belies otherwise solid demand from consumers and businesses. The report is due Thursday. Meanwhile, economists predict European data on Friday will show the single-currency bloc stuck at the same sluggish pace of expansion it saw at the end of last year. Greater divergence is on the cards in the coming quarters, with the euro area more exposed to shock from the conflict at its border. Things could get worse yet for households and businesses if the European Union overcomes the reluctance of a handful of states to impose an embargo on Russian oil imports.

More of a pressing concern for policy makers on both sides of the Atlantic is surging inflation. A preliminary reading for April in the euro area is expected to show price pressure at record highs, rising 7.5% on year, albeit slightly lower than the 8.5% recently posted in the US.

Elsewhere, Russia is expected to cut interest rates and Colombia and Hungary to raise them, with central banks in Japan, Sweden, Guatemala and Botswana also scheduled to meet. In France, President Emmanuel Macron is predicted to win a second five-year term in Sunday’s vote. In the less likely event his rival Marine Le Pen prevails, European policy making would be jolted onto a radically different track. 

In more detail…


The government’s initial tally of first-quarter gross domestic product is projected to show firmer growth in household outlays compared with the end of 2022. Yet recent reports hinted that hot inflation was starting to temper demand for some goods as the January-March period drew to a close.

Economists project Thursday’s GDP report to show a 3.4% annualized increase in first-quarter spending, a pace that’s unlikely to be repeated for the remainder of 2022. According to Bloomberg, economists have this month downgraded their estimate for growth in second-quarter household outlays to a 2.3% rate from 2.9% in the March survey.

Business investment, which was likely solid in the first quarter, is set to remain robust through year-end as companies seek to improve their productive capacity. And while rising mortgage rates may take some air out of the housing market, construction spending is seen holding up in the near term as builders address huge order backlogs. 

Key government data on Friday are expected to show a decline in inflation-adjusted spending for March and another sizable gain in employment costs during the first quarter.

Federal Reserve policy makers are in quiet period ahead of the May 4 FOMC meeting, while in Canada, central bank Chief Tiff Macklem will appear at a parliamentary committee on Monday.


In the run-up to Friday’s GDP number, nine individual country readings are due, including from Germany and France, the region’s two biggest economies. Inflation data across the bloc and confidence numbers also are set to be published. Regardless of how the first quarter panned out, Germany’s Finance Minister Christian Lindner highlighted risks from the conflict in Ukraine, now moving into its third month. “The danger of stagflation is real,” Lindner said on Saturday. 

On Friday, another rate cut is expected in Russia as central bank dials back some of the emergency measures imposed at the start of the war amid signs the economy is steadying for now. 

A day earlier, Sweden’s Riksbank will probably keep its benchmark rate unchanged at zero, while speculation is growing that policy makers will flag their first rate hike in June, followed by a string of increases before 2024. Hungary is predicted to raise borrowing costs, while Botswana is likely to hold steady.

Turkey’s central bank is expected to raise its inflation forecasts in a quarterly report scheduled for Thursday. Consumer prices surged by an annual 61% last month, driven by fuel and food costs. The IMF said this week it expects average inflation in Turkey to be about 60.5% this year, before slowing to 37% in 2023, when President Recep Tayyip Erdogan faces a general election.


The Bank of Japan is expected to forecast the fastest inflation in decades outside of tax hike years, while sticking to a stimulus stance increasingly out of sync with the Fed and other major central banks. A growing number of economists expect the BOJ will take some kind of action in response to the weakening yen and rising prices later this year. For now, Prime Minister Fumio Kishida is expected to unveil measures to ease the impact of higher energy prices for companies and consumers before the central bank meets. 

Inflation in Australia could fuel further bets on a rate hike in June or earlier if it beats forecasts.

South Korea’s economy likely grew at a slower pace in the first quarter as the omicron wave crimped consumption. China’s slowdown, the war in Ukraine and higher interest rates cloud the outlook for the current quarter as Rhee Chang-yong takes the helm of the Bank of Korea.


Mexican retail sales for February may underscore the drag on demand from persistent inflation, rising borrowing costs and souring consumer sentiment. The country’s unemployment data should again point to labor market slack and a slow recovery in the services sector. On Friday, look for the flash reading on first-quarter output to show some rebound from its stall in the second half of 2021.

In Brazil, a two-week pause in a strike by central bank staff over falling real unleashes a torrent of data. The spotlight will be on consumer price reports, with the mid-month reading out Wednesday and the country’s broadest measure of inflation reported Thursday.

Closing out the week, Colombia is all but certain to raise its key rate for a sixth straight meeting from the current 5%. The central bank took a cautious approach in March with a smaller-than-expected 100 basis-point hike, but inflation has since jumped to a six-year high.


An ominous feature of yesterday’s S&P 500 price action? – April 22

Russian oil output is down 10% from its pre-war level – the oil price will rise again – April 21

The impact of the weak Yen on US 10-year yields – April 20

Multiple leading indicators point to a precarious outlook for US growth over the coming year or two – April 19

How much confidence should we have in Powell’s Fed? – April 18