Key Events: RBA to Cut Rates, With Fed Speakers Galore
- By Macro Hive
Key Events
G10
In the US, there is…
- S&P PMI – Thursday. This is more a market than economic event as PMIs have decoupled from GDP. For market impact please see our event monitor.
In the Eurozone and UK, the main events will be:
- UK April CPI – Wednesday. The outturn will be dominated by one-off price rises. The market is looking for 3.6% in core and 3.3% in headline, below May’s MPR expectation.
- EZ final April CPI – Monday. The market is looking for no change versus the preliminary outturn, which roughly matches with final preliminary national outturns. There is likely to be a strong Easter impact, but we see the ECB forecasts as realistic in the near-term.
- UK April public sector finances – Thursday. We will watch for continued undershoot in income tax receipts versus OBR estimates, which would suggest tighter policy in Autumn.
- UK April retail sales – Friday. The UK consumer remains under pressure. The market expects another relatively strong MoM move, supporting retail sales’ recovery.
Elsewhere in G10:
- Canada CPI – Tuesday. Last month’s CPI showed the first normalisation following five months of hot data. Focus will be on how much pricing power companies have given rising uncertainty.
EM
- South Africa CPI – Wednesday. Less favourable base effects alongside ZAR weakness will end disinflation. But CPI will remain well below target given fuel prices dropping again through April.
- South Africa budget – Wednesday. Budget 3.0 will contain no contentious VAT hike. Focus will be on spending cuts and commitment to continued reforms and fiscal consolidation under the fragile coalition.
- Poland real economy data – Wednesday/Thursday. After a disappointing Q1, April data on IP and construction are key to gauge any pickup in macro momentum. Wage data will also matter for the pace of further rate cuts.
- China’s April economy data – Monday. As the production PMI suggests, we expect a slowdown in industry production. The market expects an acceleration of retails sales. We are less optimistic given weak households’ demand for short-term credit and weak HF housing market data.
Central Banks in Action
- Seventeen Fed speakers. We will watch for changes in their views following the weak price and real sales data. We will especially focus on Williams (voter, dove) on Monday, Musalem (non-voter, hawk) on Tuesday and Hammack (non-voter hawk) on Wednesday.
- PBoC LPR – Tuesday. As communicated in the 7 May presser, the PBoC will lower the LPRs by 10bps.
- RBA to cut 25bps – Tuesday. The RBA is widely expected to cut the cash rate 25bps to 3.85%. Markets will focus on dovish biases and language around tariffs.
- BoJ Noguchi (dove) speech – Thursday. Following Nakamura’s speech this week, we hear from another dove, Noguchi. We expect him to make a case for further patience amid rising uncertainty.
- BoE speakers. These will include Pill on Tuesday, Breeden, Dhingra and Pill (again) on Thursday. Pill will be most interesting particularly in his hawkish views on the labour market after the most recent release.
- Eleven ECB speakers and the ECB minutes – Thursday. We will be listening for views on tariff. So far most who have come out with views have concentrated on the disinflationary impact of tariffs. This suggests to us risk of over-cutting.
Markets to Watch
- AUD/NZD is likely to fluctuate around the RBA’s decision. We took profit on our short but are looking to re-enter the trade.
- UK rates could see movement on UK inflation data. However, we warn it is a single month with many one-off impacts, so not to draw too strong conclusions. We like being long SONIA Z6 and 10Y linkers.
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