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Where Will Rates Go? BOJ, ECB Take Center Stage

Hava Pashazadeh
Friday, 6 Apr 2007 | 1:15 AM ET

It’s time to take full advantage of the three-day weekend. Eat well and get plenty of rest because next week is packed with earnings and data for ye eager market participants.

Economic Data

As Monday's opening trade bell tolls, analysts and economists will be on theirs guard. It will be a heavy start to the week for most Asian markets, as investors looking for direction, will be out hunting for any and all useful insights on which way the Bank of Japan is likely to head as their two-day policy meeting kicks off.

Tuesday is the day of truth for Japan, as the BOJ announces their decision to hike, lower or hold the current 0.5% interest rate. Toru Umemoto, Chief FX Strategist at Barclays Capital says there's a chance the BOJ may not raise rates until the third quarter of 2007.

Business Calendar April 16 - 20

Monday April 16 U.S. March Retail Sales
Tuesday April 17 U.S. March CPI, Subprime Hearing
Thursday April 19 China Q1 GDP, Japan Feb Tertiary Activity Index

Adding a dash of diplomacy during the midweek – China's Premier Wen Jiabao visits Japan on Wednesday, marking the first trip by a Chinese leader in seven years. Wen has already said he hopes to “melt the ice” between China and Japan. Wen hopes that a joint document highlighting the benefits of a closer relationship between the two neighbors will be produced during his visit.

Also on Wednesday, participants will be watching to see if Japan’s machinery orders can muster up enough strength to top last month's record figures.

On the coattails of the BOJ’s rate decision, the European Central Bank will also decide the direction of rates on Thursday. Market consensus says another hike isn't expected until June; nevertheless, savvy participants will keep an eye out for any surprises.

Rounding out the end of the week, the release of U.S. trade balance figures and consumer sentiment data on Friday. Eyes will be glued to these figures, as they’ll likely direct the path of the trade dispute between China and the U.S.

Finally the International Monetary Fund and the World Bank roll up their sleeves in Washington for their annual Spring meeting.

Earnings

On the earnings front, India's Infosys is set to post fourth quarter results on Friday. While the Indian rupee's sudden surge against the U.S. dollar isn't likely to impact this particular outcome, investor's will take it in to consideration for next year's guidance. Edelweiss Research expects Infosys to close the fourth quarter with revenues of 38.7 billion rupees and net profit of 10.6 billion rupees. Earnings per share estimates stand at 18.9 rupees.




Other major company earnings being released in the Easter week include:

Asian Corporate Earnings Calendar

Monday April 9 Takashimaya, TSMC
Wednesday April 11 Sun Hung Kai
Thursday April 12 Fast Retailing
Friday April 13 Infosys

Holidays

Australia, Hong Kong, the Philippines, New Zealand and Europe will be closed on Monday for the Easter holiday. Thailand will be closed on Friday for the Songkran Festival.

Looking Back

And that’s the week ahead for Asia. We'll leave you with some special days of note …

This Week In History

1837 April 17 J.P. Morgan, American financier and philanthropist was born
1955 April 18 Albert Einstein died
570 April 20 Prophet Muhammed, founder of Islam was born
1889 April 20 Adolf Hitler, Austrian-born dictator who ruled Germany during the WWII was born
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