Upcoming Economic Events
- Sat: Chinese Trade
- Mon: Chinese Inflation (April), Norwegian Inflation (April)
- Tue: BoJ SOO (April), IEA STEO (May), EU Informal Meeting of Energy Ministers (May 12-13), Japanese Household Spending (March), German HICP Final (April), Italian Industrial Production (March), German ZEW (May), US Inflation (April)
- Wed: BoC Minutes (April), EIA OMR (May), OPEC MOMR (May), Riksbank Minutes (May), French Unemployment Rate (Q1), Swedish Inflation Final (April), French Inflation Final (April), EZ Employment Change (Q1), EZ Industrial Production (March), EZ GDP 2nd Estimate (Q1), US PPI (April)
- Thu: Holiday: Europe’s Ascension Day, UK GDP (March/Q1), Industrial Production (March), Indian WPI (April), Spanish HICP Final (April), Chinese M2 Money Supply (April), US Retail Sales (April), US Export/Import Prices (April), US Jobless Claims (May 9), South Korean Export/Import Prices (April)
- Fri: Japanese PPI (April), German Wholesale Prices (April), Norwegian GDP (Q1), Italian HICP Final (April), Canadian Wholesale Sales (March), US Industrial Production (April)
Chinese Trade Data
China is set to release its April trade data on Saturday, with expectations for the surplus to expand significantly to CNY 570 billion, up from CNY 354.75 billion, and to approximately USD 82.4 billion from USD 51.13 billion. ING forecasts project an export increase of around 6.5% year-on-year, accompanied by a notable 20.4% rise in imports. This surge in imports may reflect strong domestic restocking efforts and escalating commodity and energy costs. Market analysts will focus on whether high energy prices are driving import values, potentially influencing the underlying dynamics of the trade surplus.
Chinese Inflation
Scheduled for release on Monday, China’s April CPI and PPI figures are anticipated to exhibit easing headline inflation, with CPI predicted to settle between 0.8% and 1.0% year-on-year, compared to the previous 1.0%. Core CPI is likely to remain subdued at around 1.1% to 1.2%, indicating persistent weakness in domestic demand. In contrast, the PPI is expected to strengthen, moving into positive territory with forecasts around 1.5% to 1.9% year-on-year due to rising energy and commodity prices, marking a rebound from previous deflation.
Bank of Japan Summary of Opinions
On Tuesday, the release of the Bank of Japan’s Summary of Opinions will be critical in gauging the extent of its hawkish shift following a 6-3 vote split. Market participants will scrutinize any dissenting opinions and the growing support for a potential policy hike, particularly in light of an upgraded inflation outlook and persistent weakness in the Japanese yen. Insights diverging from Governor Ueda’s cautious messaging will also be closely monitored, especially indications of increased urgency within the board.
US CPI and PPI Reports
The Consumer Price Index (CPI) in the United States is projected to rise 0.6% month-on-month for April, slightly easing from the previous 0.9%. The core inflation rate is expected to increase by 0.4% month-on-month, climbing from the prior 0.2%. Meanwhile, the Producer Price Index (PPI) is forecasted to rise 0.4% month-on-month, down from 0.5% previously. Recent reports highlighted an uptick in energy prices, particularly a 10.9% monthly rise in March driven by gasoline prices, which soared by 21.2%. As Fed officials remain focused on inflation amid a stable labor market, traders will keep a close eye on the potential impact of the ongoing energy crises on consumer demand.
Bank of Canada Minutes
On Wednesday, the Bank of Canada (BoC) minutes from its last meeting will provide essential insights into its monetary policy stance. The BoC held its interest rate steady at 2.25%, at the lower end of its neutral range, as it assessed the immediate impacts of the war on inflation. The minutes will indicate whether there are any changes regarding the bank’s willingness to adjust rates further or maintain a cautious approach, especially if significant trade restrictions are imposed by the U.S.
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Thursday’s retail sales report will be critical for assessing consumer spending trends. A previous report for March indicated a robust 1.7% month-on-month rise, mainly fueled by gasoline sales, while core sales showed a 1.9% increase. Forward indicators suggest that ex-auto retail sales may rise 1.1% month-on-month in April. Analysts anticipate this could reveal consumer resilience despite pressures from elevated energy costs. Nonetheless, growing gasoline prices may pose risks to disposable income, currently under scrutiny as consumers adjust to evolving economic conditions.
Trump-Xi Meeting
In a pivotal diplomatic engagement, U.S. President Trump will visit Beijing for discussions with Chinese President Xi on May 14-15. The agenda includes various pressing topics such as trade relations, agricultural collaboration, and the implications of the ongoing Middle East conflict. As expectations for a resolution seem limited—evidenced by Polymarket’s 17% probability for a peace deal by the 13th—market participants anxiously await any developments regarding U.S.-China economic dynamics.