Week’s main events (May 19 – May 23)

A series of high-impact economic events is slated for this week, poised to influence global financial markets. Key highlights include interest rate decisions from the Reserve Bank of Australia (RBA) and the People’s Bank of China (PBoC), alongside inflation reports from Japan, the United Kingdom, and Canada, as well as comprehensive Purchasing Managers’ Index (PMI) data from major economies. While the PBoC has maintained a steady policy stance in recent months, potential policy shifts cannot be ruled out. Conversely, the RBA is broadly expected to implement a 25-basis-point rate cut in response to evolving domestic conditions and global trade policy uncertainties. On the inflation front, Japan and the UK are anticipated to report rising consumer price pressures, whereas inflation in Canada is expected to stabilize. Meanwhile, PMI readings will offer crucial insights into the performance of the manufacturing and services sectors — core drivers of economic activity. These indicators will be closely monitored for signals of growth momentum and potential policy implications.

Monday, May 19

On Monday, China is set to release a comprehensive set of macroeconomic data, including figures on industrial activity and the labor market. Year-on-year data is expected to show a modest improvement in growth momentum. However, the recent reduction in reserve requirement ratios by the People’s Bank of China reflects policymakers’ acknowledgment that the economy requires additional support. Despite ongoing domestic and external challenges, these measures underscore the government’s commitment to meeting its ambitious 5% GDP growth target. It’s a bank holiday in Canada.

Main events of the day:

– New Zealand Producer Price Index (q/q) at 01:45 (GMT+3).
– China Industrial Production (m/m) at 05:00 (GMT+3);
– China Retail Sales (m/m) at 05:00 (GMT+3);
– China Unemployment Rate (m/m) at 05:00 (GMT+3);
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
– Switzerland SNB Chairman Schlegel speaks at 19:30 (GMT+3).

Tuesday, May 20

China’s central bank is set to revise its benchmark lending rates, which have remained at record lows in recent months. A 0.10% rate cut is expected on Tuesday for both the 1-year and 5-year lending rates. On May 13, the offshore yuan set a six-month high against the dollar, and a rate cut could put further pressure on the yuan. Also on Tuesday, the Reserve Bank of Australia (RBA) is expected to lower its policy rate by 25 basis points, from 4.10% to 3.85%. Such a move could weigh on the Australian dollar in the short term. Attention will turn to Canada’s consumer inflation data during the US trading session. The median CPI, a measure closely monitored by the Bank of Canada, is projected to remain steady at 2.9% y/y, with a potential annualized uptick of 0.1%. While the Canadian dollar is not expected to exhibit significant directional movement, a spike in market volatility is likely around the data release time.

Main events of the day:

– China PBoC Loan Prime Rate at 04:15 (GMT+3);
– Australia RBA Interest Rate Decision at 07:00 (GMT+3);
– Australia RBA Monetary Policy Statement at 07:00 (GMT+3);
– Australia RBA Press Conference at 08:30 (GMT+3);
– Canada Consumer Price Index (m/m) at 15:30 (GMT+3).

Wednesday, May 21

During Wednesday’s Asian session, market participants will closely monitor Japan and New Zealand trade balance figures. A surplus, where export growth outpaces imports, generally supports the respective national currencies, while a deficit tends to exert downward pressure. Later in the day, the UK will release its latest inflation data. With rising utility costs, including electricity and water bills, headline inflation is expected to accelerate from 2.6% to 3.3% year-on-year. Despite this anticipated increase, the Bank of England (BoE) is unlikely to shift its policy stance soon as wage growth continues to outstrip inflation. Meanwhile, softer consumer sentiment and a recent decline in public support for Prime Minister Keir Starmer, primarily driven by weakening backing for the Labour Party, add a layer of political uncertainty to the economic outlook.

Main events of the day:

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
– Japan Trade Balance (m/q) at 02:50 (GMT+3);
– UK Consumer Price Index (m/m) at 09:00 (GMT+3);
– UK Producer Price Index (m/m) at 09:00 (GMT+3);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

Thursday, May 22

On Thursday, market attention will turn to releasing manufacturing and services Purchasing Managers’ Index (PMI) data across major economies. While most PMI readings remain below the 50 threshold, indicating continued contraction, the recent trend has gradually improved. In particular, Germany, France, and the United States are expected to post modest gains in PMI figures, suggesting a potential stabilization in economic activity. In contrast, Japan and Australia are forecast to decline, highlighting regional divergences in business sentiment and sector performance. These releases will be closely watched for insights into the evolving pace of global economic recovery.

Main events of the day:

– Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
– Australia Services PMI (m/m) at 02:00 (GMT+3);
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– Japan Services PMI (m/m) at 03:30 (GMT+3);
– Eurozone German Manufacturing PMI (m/m) at 10:30 (GMT+3);
– Eurozone German Services PMI (m/m) at 10:30 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– Eurozone Services PMI (m/m) at 11:00 (GMT+3);
– Eurozone German ifo Business Climate (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– UK Services PMI (m/m) at 11:30 (GMT+3);
– Eurozone ECB Monetary Policy Meeting Accounts at 14:30 (GMT+3);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
– US Manufacturing PMI (m/m) at 16:45 (GMT+3);
– US Services PMI (m/m) at 16:45 (GMT+3);
– US Existing Home Sales (m/m) at 17:00 (GMT+3);
– US Natural Gas Storage (w/w) at 17:30 (GMT+3).

Friday, May 23

The key release on Friday will be Japan’s inflation report, with analysts forecasting an increase in the year-on-year rate from 3.2% to 3.5%. Such a rise could reinforce expectations that the Bank of Japan may consider another rate hike, potentially supporting the yen. In addition, retail sales figures from the United Kingdom and Canada will be closely watched. Stronger-than-expected results typically bolster the respective national currencies, as they signal resilient consumer demand and a more robust economic outlook.

Main events of the day:

- - - – New Zealand Retail Sales (q/q) at 01:45 (GMT+3).
    - – Japan National Core CPI (m/m) at 02:30 (GMT+3);
    - – UK Retail Sales (m/m) at 09:00 (GMT+3);
    - – German GDP (m/m) at 09:00 (GMT+3);
    - – Canada Retail Sales (m/m) at 15:30 (GMT+3);
    - – US New Home Sales (m/m) at 17:00 (GMT+3).

by JustMarkets, 2025.05.19

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