3 numbers to watch: BoE, US initial claims, US trade balance

It has been a quiet week on the economic data front with political news in Europe stealing the headlines again, following the elections in France and Greece. As we wrote the other day, the probability of Greece leaving the Eurozone has increased significantly and the rhetoric coming out of Athens these days has not changed our view. But let us make two important points about Greece in the event it does leave. Firstly, it will likely create high inflation, devaluation of the Drachma, no structural reforms, massive relative loss of wealth per capita. Secondly, it will most likely be positive for markets.

The US stock market declined for the sixth straight trading day yesterday and the major Asian markets are currently trading down ahead of Europe's open with FTSE 100 index futures currently slightly positive. Today the three most important things to watch are:

Bank of England rate and asset purchase programme decision: There is likely to be no change in policy when the BoE announces unchanged rates of 50 basis points and unchanged asset purchases of GBP 325B at GMT 11:00. For the BoE everything boils down to inflation down the road. Relative to the Federal Reserve and the European Central Bank, the BoE has dealt with higher core inflation. But if price pressures remain elevated then it's a sign that they are more permanent than transitory and the BoE might be forced to move on rates next year. Let us hope for the UK economy that things have changed gear by then.

US trade balance to widen in March on higher imports: With higher fuel costs in March and a pickup in shipments from China, US imports from March are expected to have increased. At the same time, the global economy has softened a bit in the period so exports have probably faced some headwinds. Overall, consensus is looking for a widening of the trade balance to minus USD 50B from minus USD 46B in February. The figures are released at GMT 12:30.

US initial jobless claims to stay low? Following the first three weeks in April with significantly higher initial jobless claims than observed previously in the year - last they bounced back to those 360-370K levels again - The Street is looking for 368K, up slightly from 365K last week. As US initial jobless claims are one of the most timely series on the US economy it is of great importance for analysing trends in the US labour market. In order to ease the concerns that the US economy might be slowing down again we need good initial claims confirming that the labour market is printing initial claims at the 360-370K level, which indicates healthy economic activity. With the best US job openings figures in more than four years released yesterday there is upside risk to the initial jobless claims. The figures are released at GMT 12:30.