Market movers ahead
- US-China trade talks are set to reach the endgame in Washington next week. We see a high probability that the talks will end with an announcement of a Xi Jinping-Donald Trump signing meeting in late May or early June.
- German industrial production for March should give more clues as to the state of European industry. So far, ‘soft data’ (surveys) have been weaker than ‘hard data’.
- Focus in the EU Commission spring forecast will be on fiscal policy and the projections for Italy.
- In China, data on exports should add more information about the simmering recovery. CPI inflation is likely to push higher due to an increase in pork prices as African swine fever has intensified recently.
- We expect US core CPI inflation to show an unchanged rate of 2.1% in April.
- In Scandinavia, focus turns to the Riksbank minutes and inflation out of Norway, where we look for a decline in core inflation.
Weekly wrap-up
- Euro area GDP for Q1 beat expectations, painting a slightly brighter picture of the economy than survey data suggest. US GDP for the first quarter also came out stronger than expected. Chinese PMI data was lower following very strong March readings.
- There were no major changes to Fed policy this week. The Fed is firmly on hold, with no policy bias in either direction.
- Oil prices had a volatile week on Trump tweet and supply concerns following the military coup attempt in Venezuela. Risk appetite is in decline as markets reassess the cyclical outlook and scope for a global recovery.
