HomeContributorsFundamental AnalysisWeek Ahead – US CPI Data Eyed While BoE Seeks to Get...

Week Ahead – US CPI Data Eyed While BoE Seeks to Get Inflation Back Below 10%


The labor market is showing signs of resilience, but now the focus shifts back to inflation, with a close eye staying on the banking space. The banking system does not look ‘sound and resilient’ as more banks come under stress.  US regulators will eventually be forced to act as the banking crisis worsens and that could mean the further unwinding of more banks.

The April inflation report is expected to show that the disinflation process is starting to lose momentum, which could delay some Fed rate cut bets.  Headline inflation is expected to remain stuck at 5.0%, which is the slowest pace in almost 2 years.  The month-over-month reading is expected to rise from 0.1% to 0.4%.  Core inflation might only slow a bit, but that should start to fall more quickly in the coming months as the housing lag will better reflect softening rent and home prices.

President Biden will also meet with four top congressional leaders on May 9th  to discuss the budget which will definitely impact debt ceiling negotiations.

Peak earnings are behind us but we still get some important results. Corporate updates for the week:  Bayer, Credit Agricole, Devon Energy, Duke Energy, Engie, Honda Motor, PayPal Holdings, Saudi Arabian Oil, SoftBank, Toyota Motor, Walt Disney, and Westpac Banking.


It’s all looking a bit quiet for the euro area next week with the few data releases we do have being tier three and therefore not particularly impactful. The ECB slowed its tightening cycle in May but further hikes are likely over the next few meetings with markets pricing in another one or two before the end of the year.


The Bank of England may be convinced that inflation is about to fall sharply but I doubt it will be brave enough to pause the tightening cycle while inflation is still above 10%. A 25 basis point hike is priced in for Thursday, after which markets expect one more to follow before then easing next year. GDP data then follows on Friday and is expected to show the economy growing marginally again which is probably the best we can hope for over the coming quarters.


Inflation data will be in focus next week as the CBR looks for evidence of price pressures easing on a sustainable basis which will allow for further rate cuts in the future. But it is being cautious and has signaled that rate cuts are neither guaranteed or even necessarily on the horizon. The CBR releases its monetary policy report on Thursday which may shed further light on the path for interest rates.

South Africa

There are a few notable economic releases next week but mostly tier-two or three data. Manufacturing production on Thursday is one standout, while business confidence on Wednesday could also be of interest.


There’s just over a week to go until the election so there may not be a huge amount of interest in what the economic data has to say, despite there being some interesting releases. Ultimately, the outcome of the election is what will dictate future interest rate moves and the path of travel for the economy, not whether unemployment can fall below 10%. Can President Erdogan cling to power after such a turbulent few years?


There are no noteworthy events over the next week.


Consensus estimates expect the balance of trade for April, released on Tuesday to show a decline to US$74.3 billion from $88.19 billion in March with exports growth decline to 8% year-on-year in April from 14.8% printed in March while zero growth in imports growth after it contracted by -1.4% year-on-year in March, its 6th consecutive month of negative growth.

Credit growth data will be on the radar where new yuan loans are expected to decline to CNY 3.10 trillion in April from CNY 3.89 trillion in March, a slight dip in outstanding loan growth is being forecasted at 11.6% year-on-year in April from the 11.8% in March, its fastest pace of increase since October 2021. In addition, the M2 money supply is expected to dip slightly as well to 12.6% year-on-year in April from 12.7% in March.

Next up on Thursday, key inflation data is the focus where the consumer inflation rate for April is expected to come in at a slight increase to 0.9% year-on-year from 0.7% in March, its lowest reading since September 2021. Meanwhile, the slump in producer prices is expected to slow down slightly to -2.1% year-on-year in April from -2.5% in March, its 6th consecutive month of production deflation and steepest contraction since June 2020. If such forecasts turn out as expected, inflationary pressures in China are way below an average gauge of inflation rate among emerging and developed countries which suggests that China’s central bank, the PBoC, has more leeway to conduct accommodating monetary policy.


The key data to focus will be on industrial production and CPI out on Friday. Growth in industrial production is forecasted to shrink to 3.2% year-on-year in March from 5.6% in February.

Meanwhile, consumer price inflation for April is expected to ease further to 5.50% year-on-year from 5.66% in March, its lowest since December 2021; below RBI’s upper tolerance limit of 6%.


On Monday, data on building permit growth for March is forecast to show a decline to 2.6% month-on-month from 4.0% in February.

The Westpac Consumer Confidence Index for May out on Tuesday is forecasted to decline to 82.1 (-4.3% month-on-month) from 85.8 in April.

New Zealand

The key data to focus on will be food inflation for April out on Thursday where it is expected to ease to 11.4% year-on-year after the biggest increase of 12.1% in March since September 1989.

To round up the week, the manufacturing PMI for April out on Friday is forecasted to decelerate further to 47.0 from 48.1 in March.


A couple of key releases to take note of; household spending for March out on Tuesday where it is expected to show a slowdown in growth to 0.4% year-on-year from 1.6% in February while expanding 1.5% month-on-month in March from a contraction of -2.4% printed in February.

On Thursday, market participants will be able to have some clues on the thinking of BoJ officials via the release of its Summary of Opinions from the most recent April monetary policy meeting where it maintained its dovish stance despite upgrading its inflation forecasts for FY 2023 and 2024.

Lastly, the current account surplus for March is forecasted to expand to JPY 2,947.3 billion from JPY 2,197.2 billion, and growth in bank lending is expected to be almost unchanged at 2.9% year-on-year in April versus 3% in March.


No key data.

Economic Calendar

Saturday, May 6

Economic Events

  • German Chancellor Scholz is in Kenya
  • Taliban’s top diplomat, Amir Khan Muttaqi to discuss extending Belt and Road initiative in Afghanistan with Chinese counterpart Qin Gang in Pakistan

Sunday, May 7

Economic Data/Events

  • China data expected this week includes forex reserves, Money Supply, Trade Balance, New yuan loans, Aggregate financing
  • Japan PM Kishida to visit South Korea

Monday, May 8

Economic Data/Events

  • US wholesale inventories
  • Australia building approvals
  • Chile copper exports, CPI, trade
  • Germany industrial production
  • Taiwan trade
  • UK bank holiday honoring coronation of Charles III
  • Meeting on Indo-Pacific trade pact in Singapore
  • ECB Chief Economist Lane speaks at Forum New Economy conference in Berlin
  • Riksbank Deputy Governor Floden speaks on competition and inflation

Tuesday, May 9

Economic Data/Events

  • Australia consumer confidence
  • China aggregate financing, trade, money supply, new yuan loans
  • France trade
  • Japan household spending
  • Mexico international reserves, CPI
  • President Joe Biden to meet with congressional leaders on the debt limit.
  • Victory Day in Russia as war rages in Ukraine
  • French finance minister Le Maire, Bank of France Governor Villeroy, ESMA director Cazenave, and EU climate chief Frans Timmermans speak at Bloomberg Future of Finance Conference in Paris
  • ECB Governing Council member Rehn speaks at the Bank of Finland event on digital euro
  • ECB Chief Economist Lane participates in a panel at the IMF event ‘Europe’s Balancing Act: Taming inflation without a recession’
  • Riksbank issues minutes of April monetary policy meeting
  • Riksbank Deputy Governor Floden speaks on monetary policy

Wednesday, May 10

Economic Data/Events

  • US Apr CPI M/M: 0.4%e v 0.1% prior; Y/Y: 5.0%e v 5.0% prior; CPI ex Food & Energy M/M: 0.3%e v 0.4% prior; Y/Y: 5.4%e v 5.6% prior
  • Poland rate decision: Expected to keep the base rate steady at 6.75%
  • Germany CPI
  • Italy industrial production
  • New Zealand home sales
  • Poland rate decision
  • South Korea jobless rate
  • Hungary CPI
  • Turkey industrial production
  • NATO defense chiefs meet in Brussels
  • Italy’s Istat monthly economic note
  • Sweden Riksbank Deputy Governor Bunge speaks on economic development
  • ECB Governing Council member Centeno makes closing remarks at a conference in Lisbon on “Digital Financial Literacy: a Strategy for Portugal”

Thursday, May 11

Economic Data/Events

  • US PPI, initial jobless claims
  • BOE rate decision: Expected to raise rates by 25bps to 4.50%
  • China PPI, CPI
  • New Zealand food prices
  • Peru rate decision
  • Philippines GDP
  • South Africa manufacturing production
  • Turkey current account
  • UK industrial production, GDP
  • G7 Finance minister and central bank governors meet in Japan
  • BOJ releases Summary of Opinions from April monetary policy meeting
  • Sweden Riksbank’s Floden speaks on monetary policy
  • German Finance Minister Lindner begins a five-day trip to Japan and China

Friday, May 12

Economic Data/Events

  • US University of Michigan consumer sentiment and inflation expectations
  • France CPI
  • India industrial production, CPI
  • Japan M2 money stock
  • Mexico industrial production
  • New Zealand PMI
  • Norway GDP
  • Russia CPI
  • Spain CPI
  • Fed’s Jefferson and Bullard participate in a panel discussion on monetary policy at Stanford University
  • EU foreign ministers meet in Stockholm
  • President Biden hosts Spanish Prime Minister Sánchez at the White House
  • Sweden Riksbank Deputy Governor Jansson speaks
  • Bank of England Chief Economist Pill speaks
  • Bank of Canada issues Senior Loan Officer Survey

Sovereign Rating Updates

  • Denmark (Fitch)
  • Italy (Fitch)
  • Sweden (Fitch)
  • European Union (DBRS)
  • Luxembourg (DBRS)
MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading