Week’s main events (May 05 – May 09)

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 05

On Monday, market attention will turn to Switzerland’s inflation release. Annual consumer price inflation is forecast to remain steady at 0.3%. Given the sensitivity of the Swiss franc to inflation surprises, heightened volatility is anticipated in CHF currency pairs following the publication. It’s a bank holiday in the United Kingdom and Japan.

Main events of the day:

– Switzerland Consumer Price Index (m/m) at 09:30 (GMT+3);
– US ISM Services PMI (m/m) at 17:00 (GMT+3).

Tuesday, May 06

On Tuesday, investor focus will shift to service sector activity data across major economies. The Services PMI remains below the 50 threshold in much of the Eurozone, indicating contraction. Any further deterioration in these figures could exert downward pressure on the euro. During the US trading session, attention will turn to trade balance data from Canada and the United States. A widening of trade deficits may weigh on the Canadian dollar (CAD) and the US dollar (USD) as markets reassess the external sector’s impact on economic momentum.

Main events of the day:

– Caixin Services PMI (m/m) at 04:45 (GMT+3);
– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
– Germany Services PMI (m/m) at 10:55 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– Eurozone Producer Price Index (m/m) at 12:00 (GMT+3);
– US Trade Balance (m/m) at 15:30 (GMT+3);
– Canada Trade Balance (m/m) at 15:30 (GMT+3);
– Canada Ivey PMI (m/m) at 17:00 (GMT+3).

Wednesday, May 07

The key event on Wednesday will be the Federal Open Market Committee (FOMC) meeting. Despite political pressure from President Donald Trump and Treasury Secretary Scott Bessent advocating for a reduction in the discount rate, the Federal Reserve is widely expected to maintain its current policy stance, keeping the federal funds rate at 4.50%. A hold in rates, particularly in the face of such external pressure, may be interpreted by markets as a signal of policy independence and economic confidence, potentially providing support for the US dollar. In the Asian session, it is worth paying attention to the New Zealand employment report published once a quarter. Unemployment is expected to rise from 5.1% to 5.2-5.3%, potentially negatively impacting the NZD.

Main events of the day:

– New Zealand Unemployment Rate (m/m) at 01:45 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– UK Construction PMI (m/m) at 11:30 (GMT+3);
– Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
– US Federal Funds Rate at 21:00 (GMT+3);
– US FOMC Statement at 21:00 (GMT+3);
– US FOMC Press Conference at 21:30 (GMT+3).

Thursday, May 08

On Thursday, the Bank of England (BoE) is widely anticipated to lower its benchmark interest rate by 25 basis points, from 4.50% to 4.25%, in response to moderating inflation and subdued economic indicators. Such a move could weigh negatively on the British pound, particularly if the accompanying policy statement reinforces a dovish outlook. In Norway, the Norges Bank is expected to leave all monetary policy settings unchanged, maintaining its current stance amid stable economic conditions. Meanwhile, upcoming inflation data in Mexico may reveal further easing in price pressures. A soft print would likely increase market expectations for a rate cut by Banxico, potentially placing downward pressure on the Mexican peso (MXN).

Main events of the day:

– Japan Monetary Policy Meeting Minutes at 02:50 (GMT+3);
– German Industrial Production (m/m) at 09:00 (GMT+3);
– German Trade Balance (m/m) at 09:00 (GMT+3);
– Norway Norges Bank Interest Rate Decision at 11:00 (GMT+3);
– UK BoE Interest Rate Decision at 14:00 (GMT+3);
– UK BOE Monetary Policy Report at 14:00 (GMT+3);
– Mexico Inflation Rate (m/m) at 14:00 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– Canada Financial Stability Report at 17:00 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3).

Friday, May 09

Friday is expected to be relatively subdued in terms of scheduled economic releases. However, market participants will closely monitor China’s trade balance data and Canada’s labor market report. China’s exports and imports are projected to contract by 2% and 5% year-over-year. Such figures could weigh negatively on investor sentiment, particularly across Asian equity indices. In Canada, the unemployment rate is forecast to rise to 6.8%, reinforcing expectations of a potential rate cut by the Bank of Canada at its upcoming meeting. This would likely exert additional pressure on the Canadian dollar (CAD), particularly against weaker oil prices.

Main events of the day:

- – China Trade Balance (m/m) at 06:00 (GMT+3);
- – Norway Inflation Rate (m/m) at 09:00 (GMT+3);
- – UK BoE Gov Bailey Speaks at 11:40 (GMT+3);
- – Canada Unemployment Rate (m/m) at 15:30 (GMT+3).

by JustMarkets, 2025.05.05

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