ECONOMIC OUTLOOK - Monetary policy takes centre stage

London 25/04/2016 - Central bank policy is again set to dominate in the week ahead.

The Federal Reserve is expected to stand fast at Wednesday's FOMC after the minutes from the March meeting all but ruled out any action this week. But the accompanying statement could offer important signals for the near-term policy outlook. Of particular interest will be the committee's risk assessment, particularly whether the Fed's view of the external risks have receded somewhat compared with early this year

The Bank of Japan is also scheduled to meet on Thursday this week. Officials appear more receptive to stepping up monetary easing measures after Bloomberg reported last week the central bank may consider helping banks lend by offering a negative rate on some loans. As well, the relative strength of the yen, which has appreciated against the dollar this year, has negated the stimulus measures.

There are also expectations that Prime Minister Abe might deliver more infrastructure spending and other fiscal stimulus measures following the massive earthquake that struck the southern island of Kyushu earlier this month.

As well as the BoJ on Thursday, there is a bumper line-up of Japanese data, including household spending, core CPI inflation, preliminary industrial production, retail sales and the unemployment rate.

Stephen Poloz of the Bank of Canada is scheduled to speak on Tuesday while the Reserve Bank of New Zealand is expected to maintain policy when it meets on Thursday.

The economic agenda this week includes the Belgian NBB business climate and US new home sales on Monday.

Tuesday's agenda includes durable goods orders, the S&P/Case-Shiller home price index, the Richmond manufacturing index and CB consumer confidence.

Aside from the FOMC, Wednesday's data will include preliminary first-quarter GDP for the UK. Money supply and private loan figures from the EU will be under scrutiny for signs the more aggressive stimulus unveiled by the ECB in March is having the desired effect. US data includes pending home sales.

As well as the bumper run of Japanese data, the agenda for Thursday includes the German preliminary CPI and the unemployment change. US data includes preliminary first-quarter GDP and weekly jobless claims.

A busy line-up is scheduled for Friday, including UK money supply, private loan figures and mortgage approvals. A slew of data will provide the ECB's Mario Draghi with indications whether his aggressive measures to bolster growth and inflation are bearing fruit, with the release of various GDP and inflation readings as well as eurozone flash CPI inflation and unemployment data. US data includes personal spending, revised UoM consumer sentiment and the Chicago PMI. The core PCE index - the Fed's preferred inflation gauge - is also due.

China will publish official manufacturing and service PMI readings for April on Saturday. Both are expected to show a modest expansion and markets will be looking for reassurance economic activity continues to strengthen.

(Editing by Mark Shaw)