Key Events: US Retail Sales, Claims and Central Banks Galore
- By Macro Hive
Key Events
G10
In the US, there is…
- Retail sales – Tuesday. The consensus for the control group (excludes the more volatile categories) is 0.3% MoM. We see risks skewed to the downside following the pre-tariff ramp up in consumer spending. See our NEW event monitor for market impact.
- Jobless claims – Wednesday. This week’s claims clearly signalled labour market weakness, so claims will receive extra market attention, especially since claims are more reliable than the household survey’s unemployment data. See our event monitor for market impact.
In the Eurozone and UK, the main events will be:
- BoE policy decision – Thursday. Is likely to see MPC members abstain from another rate cut given how marginal the last decision was, and that data has not sufficiently changed in the meantime. There will be no presser or updated forecasts.
- UK inflation – Wednesday. Is likely to see a decent paring from April’s release given corrections to VED contributions to headline and the paring of Easter-timing effects.
- EZ final inflation – Wednesday. Watch details of wage-intensive services inflation and whether momentum there remains strong.
- UK public sector finances – Friday. May data should show whether income tax receipts are undershooting OBR expectations (as we expect).
Elsewhere in G10:
- New Zealand Q1 GDP – Wednesday. We expect GDP to surprise to the upside of RBNZ forecasts, but in line with consensus expectations. It reflects a better-than-expected recovery, pre-tariffs.
- Australia May labour force survey – Thursday. We see dovish risks on the release, with a strong reading required to match April’s outturn.
- Japan Inflation – Friday. Early signs from PPI suggests goods disinflation has now begun. However, the BoJ will be more focused on services inflation that continues broadening. While inflation data is insufficient to force a hike, a hotter outturn can add further pressure.
EM
- South Africa inflation – Wednesday. CPI is expected to remain firmly below target yet again, with transport inflation remaining subdued.
- China May housing – Monday. We expect YoY new home sales remain roughly -10% and home prices to diverge (tier one up MoM, while tier two and tier three down about -0.5% MoM).
- China May IP – Monday. The PMI indicates a production improvement (back in expansionary territory). However, HF capacity utilisation data suggests a slowdown of production growth.
- China May retail sales – Monday. Subsidies for durable goods will remain the key driver for the retail sale growth. Anecdotally, some local governments have reduced the subsidy recently, given the export sentiment has improved. The HF data (car sales and fuel sales) indicate a weakening growth rate.
Central Banks in Action
- Fed to Stay on Hold – Wednesday. We expect the Fed to remain in wait-and-see mode, with a roughly unchanged dot plot. However, the Fed will stress policy is in a good place to respond to either inflation or employment risks.
- BoE to keep rates unchanged – Thursday. Data will probably not provide enough rationale for another cut. No presser and no updated forecasts should limit the meeting’s impact.
- BoJ to stay on hold – Tuesday. Expect another cautious Ueda who will highlight tariffs uncertainty despite domestic inflation surprising higher. We think the BoJ will next hike in October.
- Riksbank to cut 25bp – Wednesday. Weaker-than-expected inflation has secured a pre-warned May cut.
- Norges rate decision – Thursday. All will focus on the updated policy rate path. Economists and markets are in consensus on a first cut in September.
- SNB to cut 25bp – Thursday. A significant inflation undershoot has secured another 25bp cut from the SNB. Markets are pricing in risk of a 50bp cut.
- Turkey rate decision – Thursday. The CBRT will likely keep the policy rate on hold and maintain a hawkish stance. But with average funding costs coming down, April’s rate hike is effectively being unwound.
- Taiwan rate decision – Thursday. Tighter monetary conditions via FX strength, alongside recent disinflation, are unlikely to trigger a rate cut yet. Still-strong growth and tariff uncertainty points to CBC remaining in wait-and-see mode.
- PBoC LPR rate decision – Friday. We expect the next 20bp cut for the key policy rates in Q3.
Markets to Watch
- US rates take centre stage next week, with the FOMC meeting and important data releases. Recently, economic data has weakened, and we will watch for the trend continuing. The STIR market could rally further in that case. However, Israel’s strikes against Iran increases risk for the long end. This occurs in a context where USD assets have a clear risk premium, especially the US dollar and USTs.
- USD/JPY and EUR/CHF likely have the most mispriced implied volatility for the FOMC meeting, according to our event monitor.
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