Below are the most important global events likely to affect FX and bond markets in the week starting May 19.
As markets calm after the U.S. and China agreed to slash tariffs for a period of 90 days, focus is set to switch to how tariffs and the uncertainty surrounding them are affecting the global economy. U.S. purchasing managers’ index on manufacturing and services activity in May will be closely watched, alongside similar figures from the eurozone and the U.K.
In Europe, investors will be watching trade talks between the European Union and the U.K., alongside data on U.K. inflation.
In Asia, markets will watch for progress in trade talks between the U.S. and other countries in the region, as well as key data from China and a rate announcement by its central bank.
U.S.
Purchasing managers’ surveys for May on Thursday will give an up-to-date indication of the health of the U.S. manufacturing and services sectors as tariffs increasingly start to hit companies.
So far, most official U.S. data have suggested that the economy is holding up reasonably well. However, these data are more backward-looking and don’t yet properly capture the aftermath of President Trump’s announcement of widespread tariffs on April 2. Although many of the very high tariffs have been scaled back, tariffs of 10% or more are still very high by recent historical standards.
“Global activity is still showing resilience including in the U.S. where continued frontloading is supporting the ‘hard data,'” analysts at Citi said in a note.
‘Soft data’, such as activity and confidence surveys, “paint a potentially grimmer picture, particularly in the U.S. where consumer and business confidence are still deteriorating,” they said.
Data on real estate activity are also due during the week, including existing home sales on Thursday and new home sales Friday, both for April. Weekly jobless claims will be released Thursday.
The Treasury will sell $16 billion in 20-year bonds on Wednesday and $18 billion in 10-year inflation-protected TIPS on Thursday.
CANADA
Canadian inflation data for April are released Tuesday and could be a key indicator for gauging whether or not the Bank of Canada will cut interest rates at its next meeting in June.
Most expect that rates will continue to be left on hold next month, but recent weak Canadian jobs figures increased the prospect of a cut.
Canadian money markets price a 36% chance that the Bank of Canada will cut interest rates in June, LSEG data show.
EUROZONE
The EU’s spring economic forecast on Monday will give an insight on how the Commission sees economic prospects in light of U.S. tariffs.
Later in the week, Thursday’s flash estimate purchasing managers’ data for France, Germany and the eurozone, as well as Germany’s Ifo business climate index, will also be watched closely to gauge how the economy is faring amid the tariffs.
“The discussion about the harmful effects of U.S. tariffs policy has lost some momentum recently,” DZ Bank economist Christoph Swonke said in a note. After four consecutive increases in the Ifo business climate index, the improvement is likely to continue in May, he said.
Final eurozone inflation data for April are due Monday. German producer price data for April are released Tuesday, Spanish industrial orders and turnover figures on Wednesday, and the French consumer confidence survey on Friday.
The European Central Bank releases the account of its April meeting on Thursday.
Germany will auction a combined 2 billion euros in 2030- and 2053-dated green Bunds on Tuesday and 4 billion euros in 2035-dated Bunds on Wednesday. On Thursday Spain will have an auction, while France has two, for nominal and inflation-linked bonds, respectively. Among the smaller issuers, Slovakia will hold an auction on Monday and Finland on Tuesday.
U.K.
In a busy week for U.K. data, post-Brexit trade talks between the U.K. and the European Union will attract attention. The U.K. government is hoping to seal a security and defense pact that will deepen ties with the bloc, although reports suggest there are some hurdles regarding the terms of a deal.
Inflation data for April on Wednesday will be the key indicator to watch for. Inflation is expected to rise in April, driven by higher energy prices and increased tax costs for employers coming into force, which could encourage some companies to put up prices.
After recent stronger-than-expected first-quarter gross domestic product data, the figures could further strengthen expectations that rate cuts from the Bank of England will be gradual.
Investec expects annual CPI inflation to rise to 3.3% in April from 2.6% in March. However, this is “largely due to increased utility costs and higher administered prices rather than a persistent increase in price pressures and will not come as a surprise to the Bank of England,” Investec economist Lottie Gosling said in a note.
Thursday’s flash U.K. purchasing managers’ surveys will show how well the services and manufacturing sectors are faring in the wake of U.S. tariffs, even as the U.K. and the U.S. have reached a deal to reduce some of this burden.
Signals of U.K. consumer confidence will be provided by the GfK consumer confidence survey for May and retail sales data for April on Friday. U.K. public finances data for April are released Thursday.
The U.K. plans the syndicated launch of a new January 2056 gilt. It also plans to sell October 2031 gilts via auction on Wednesday.
SCANDINAVIA
Denmark, Norway and Sweden will have bond auctions on Wednesday. Sweden’s National Debt Office will publish a borrowing review on Thursday, with expectations of an increase in nominal bond issuance.
AUSTRALIA/NEW ZEALAND
The Reserve Bank of Australia is set to announce its policy decision Tuesday, with strong wage growth dampening hopes for near-term rate cuts.
While robust jobs and wage data have reignited concerns about persistent inflation amid weak productivity growth, some economists still expect the RBA to cut rates in May. Both headline and core inflation are back within the central bank’s 2% to 3% target range, though strength in employment may temper the depth of easing later in the year.
Analysts at Nomura remain confident the RBA will opt for a cautious 25-basis-point cut. “The RBA typically provides less forward guidance than some other central banks and will likely regard this approach as especially prudent against the highly uncertain global backdrop,” they said. Meanwhile, CBA also expects the central bank to lower the cash rate to 3.85%.
CHINA
A raft of April data will shed light on consumption, property and other key sectors at the start of the second quarter.
China’s economic activity likely remained resilient over the month, shrugging off the impact of higher U.S. tariffs, according to a poll of economists by The Wall Street Journal. Industrial production is expected to have grown 7.7% from a year earlier, up from 5.5% in March. Retail sales likely rose 5.9% on year, slightly higher than the growth seen in March. Fixed-asset investment from January to April is expected to have remained in line with the first quarter.
House price and property investment data, also due Monday, may reinforce signs of stabilization in the real estate sector.
While the recovery path remains bumpy, new home prices are expected to stabilize in 2025, according to Morningstar analysts, supported by rounds of policy easing lifting new home sales values and local governments becoming more active in absorbing excess property and land inventory, also a positive for home prices.
“We anticipate more fiscal policies, such as homebuying vouchers and tax credits, to further stimulate nationwide home demand,” said analyst Jeff Zhang.
On Tuesday, the People’s Bank of China will announce its loan prime rate. Having already cut its key seven-day reverse repo rate earlier this month, policymakers may now pause, particularly after the U.S.-China tariff truce. Markets will also watch for further yuan appreciation.
Foreign direct investment data for April is due later in the week.
JAPAN
Bank of Japan policy board member Asahi Noguchi will meet local leaders in Miyazaki on Thursday. Markets will parse any comments on the bank’s rate-hike path, as Japan faces headwinds from U.S. tariffs.
April trade figures are due Wednesday, followed by March machinery orders on Thursday.
April CPI, due Friday, likely ticked higher as energy subsidies faded. Core inflation is expected to have risen 3.4% from a year earlier, up from 3.2% in March, according to a Quick survey.
The BOJ is scheduled to conduct purchases of Japanese government bonds across four maturities on Monday and Friday.
The Ministry of Finance will auction 1 trillion yen of 20-year JGBs on Tuesday-a reopening of the April 2025 issue-and 250 billion yen of 10-year inflation-indexed bonds on Thursday. The longer dated auction may attract insurers and pension funds, while Thursday’s could appeal to investors hedging inflation risk.
INDONESIA
Bank Indonesia announces its rate decision Wednesday, with analysts split as policymakers assess currency stability and trade shifts.
Nomura now expects a rate cut, citing easing rupiah volatility following the de-escalation in trade tensions between the U.S. and China. Still, it assigns a 40% probability to a hold, citing lingering global risks.
Barclays economists also noted the central bank’s dilemma: “It remains challenging to time future rate cuts due to the importance of the IDR,” they said. While they continue to expect the central bank to stay on its easing cycle, the latest trade developments seem to have boosted the dollar, likely reducing BI’s ability to opportunistically deliver easing.
THAILAND
Thailand will release its first-quarter GDP on Monday, offering clues on how the economy is holding up amid trade uncertainties. GDP is expected to have risen 2.8% on year, according to the median forecast of 13 economists polled by The Wall Street Journal.
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05-18-25 1714ET
