This week’s market focus centers on key macroeconomic events, including potential tariff discussions between the United States and China, the Federal Reserve’s interest rate decision, and the Bank of England’s policy meeting. With the US labor market’s resilience, the Federal Open Market Committee (FOMC) is broadly expected to maintain the federal funds rate at 4.50%. In contrast, the consensus among analysts points toward a 25 basis point rate cut by the Bank of England, reflecting signs of moderating inflation and slowing economic activity. The Norges Bank will also convene for its scheduled policy meeting; however, no changes to the current rate settings are anticipated. Market participants will closely monitor inflation figures from Switzerland, Mexico, and Norway for further signals on regional price dynamics. Canada is set to release labor market data and trade balance figures, while additional trade statistics are expected from Germany, the United States, and China.
Monday, May 12
Monday is expected to be relatively quiet in terms of market-moving events. However, investors will monitor the release of the updated US Federal Budget Statement, which may exert a modest influence on the US dollar.
Main events of the day:
- – US Fed Monthly Budget Statement (m/m) at 21:00 (GMT+3).
Tuesday, May 13
Tuesday will bring a wave of economic data across multiple regions, with the US Consumer Price Index (CPI) taking center stage. Headline inflation is forecast to ease slightly to 2.4% year-over-year from 2.5%, while the core CPI (excluding food and energy) is expected to hold steady at 2.8% y/y. A softer inflation print may weigh on the US dollar, reinforcing expectations of a dovish policy stance from the Federal Reserve. In the UK, labor market data will be released, with forecasts pointing to a potential cooling. Signs of weakening in employment conditions could increase the probability of a more aggressive rate-cutting path by the Bank of England, posing a downside risk for the British pound.
Main events of the day:
- – Australia Westpac Consumer Confidence Index (m/m) at 03:30 (GMT+3);
- – Australia NAB Business Confidence (m/m) at 04:30 (GMT+3);
- – UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- – UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- – UK Unemployment Rate (m/m) at 09:00 (GMT+3);
- – UK Trade Balance (m/m) at 09:00 (GMT+3);
- – German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- – Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- – US Consumer Price Index (m/m) at 15:30 (GMT+3);
- – UK BOE Gov Bailey Speaks (m/m) at 18:00 (GMT+3).
Wednesday, May 14
Wednesday will focus on releasing Australia’s quarterly Wage Price Index, a key indicator of inflationary pressures. Strong wage growth typically supports the Australian dollar by reinforcing expectations of tighter monetary policy. During the US session, attention will shift to the EIA crude oil inventory report. The oil market has seen heightened volatility recently, driven by unexpected production increases from select OPEC+ members. A drawdown in US inventories could further support oil prices, which posted a gain of over 4% last week.
Main events of the day:
- – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
- – Australia Wage Price Index (q/q) at 04:30 (GMT+3);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- – Canada Annual Budget Release (Tentative).
Thursday, May 15
Thursday is set to be eventful, with key releases including Australia’s employment data, GDP figures from the UK and Eurozone, and a monetary policy decision from Mexico’s central bank (Banxico). In Australia, a decline in employment is anticipated, which could increase the probability of a rate cut by the Reserve Bank of Australia as early as next week. In the UK, GDP growth is forecast to remain flat at 0.0%, raising concerns about potential economic contraction, which would likely weigh on the pound. Meanwhile, Eurozone GDP is expected to rebound with a 0.4% gain; however, any downside surprise could pressure the euro. In Mexico, economic softness coupled with a firm peso may provide Banxico with scope for another 50-basis-point rate cut. Market pricing implies a terminal rate near 7.25% over the next year. Thursday also brings key US data and policy insights. Retail sales figures will be closely watched for signals on consumer spending strength, a critical component of US economic momentum. Additionally, markets will analyze remarks from Federal Reserve Chair Jerome Powell for any clues on the future policy trajectory.
Main events of the day:
- – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
- – UK GDP (m/m) at 09:00 (GMT+3);
- – UK Industrial Production (m/m) at 09:00 (GMT+3);
- – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
- – Eurozone GDP (q/q) at 12:00 (GMT+3);
- – Eurozone Industrial Production (m/m) at 12:00 (GMT+3);
- – US Retail Sales (m/m) at 15:30 (GMT+3);
- – US Producer Price Index (m/m) at 15:30 (GMT+3);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- – US Fed Chair Powell Speaks at 15:40 (GMT+3);
- – US Industrial Production (m/m) at 16:15 (GMT+3);
- – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
- – Mexico Banxico Interest Rate Decision at 22:00 (GMT+3).
Friday, May 16
On Friday, Japan will release its preliminary Q1 2025 GDP data. According to Bloomberg’s median forecast, the economy is expected to expand by 0.2% quarter-on-quarter and 3.2% year-on-year, up from 2.9%. A stronger-than-expected print may support the Japanese yen, reinforcing expectations of additional rate hikes by the Bank of Japan later this year. During the US session, attention will turn to the University of Michigan’s consumer sentiment survey, particularly the inflation expectations component. An uptick in inflation expectations could support the US dollar by bolstering the case for a more hawkish Fed position.
Main events of the day:
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- – Japan GDP (q/q) at 02:50 (GMT+3);
- – Japan Industrial Production (m/m) at 07:00 (GMT+3);
- – Switzerland Industrial Production (m/m) at 09:30 (GMT+3);
- – Eurozone Trade Balance (m/m) at 12:00 (GMT+3);
- – Switzerland SNB Chairman Schlegel Speaks at 14:00 (GMT+3);
- – US Building Permits (m/m) at 15:30 (GMT+3);
- – US Housing Starts (m/m) at 15:30 (GMT+3);
- – US Michigan Inflation Expectations (m/m) at 17:00 (GMT+3).
by JustMarkets, 2025.05.12
Open Account