By Dow Jones Newswires staff
Below are the most important global events likely to affect FX and bond markets in the week starting May 4.
U.S. jobs data will be the highlight of the coming week as investors look for evidence of how the Middle East war has impacted the economy.
Meanwhile, focus will remain on movements in oil prices and any indications of whether the Middle East conflict could come to an end.
In Asia, attention will be centered on factory activity data, price trends and growth data, as well as an interest-rate decision in Australia. In Europe, investors will watch economic data following recent rate announcements by the European Central Bank and the Bank of England.
U.S.
The recent Federal Reserve meeting saw policymakers leave interest rates on hold, as expected, though three members dissented against the Fed’s easing bias.
Fed policymakers will likely require evidence of a weakening economy, and particularly a softer jobs market, before they will consider cutting interest rates, particularly given rising inflationary pressures due to high energy prices.
In that light, the latest nonfarm payrolls report for April, due Friday, will mark the highlight of the coming week’s data calendar.
“After an unexpectedly strong job growth in March, we expect a much more moderate increase of less than 100,000,” LBBW analysts said in a note.
U.S. money markets currently price only a small chance of a Fed interest-rate cut by the end of the year, LSEG data showed.
Further evidence on the U.S. jobs market will be watched in advance of the nonfarms data, including JOLTS job openings for March on Tuesday, ADP private payrolls figures for April on Wednesday and weekly jobless claims on Thursday.
The ISM survey on U.S. services sector activity in April, due Tuesday, and the University of Michigan’s preliminary consumer survey for May, due Friday, could provide key indications of how the U.S. economy is responding to higher energy prices amid the Middle East war.
Further data include March trade and new home sales Tuesday, then first-quarter preliminary productivity data Thursday.
The Treasury will publish its quarterly refunding statement on Wednesday.
Canada
Canadian trade data for March are due Tuesday, followed by jobs data for April on Friday.
These will be watched after the Bank of Canada recently kept its policy interest rate unchanged at 2.25%, and signaled the rate may stay close to that level if the economy evolves as forecast.
ING economists noted, however, that the BOC still described the job market as ‘soft,’ with weak hiring and job losses seen in sectors exposed to U.S. tariffs.
“While higher energy prices are a boon for Canada’s economy given it is a major net producer of oil and gas, the ongoing uncertainty about trade policy continues to hold back sentiment,” they said.
Latin America
Mexico’s central bank announces a rate decision on Thursday, where it could cut the key policy rate by 25 basis points to 6.50%.
First quarter gross domestic product data were weak, which could prompt a rate cut, said Kimberley Sperrfechter, senior emerging markets economist at Capital Economics in a note.
“Disappointing GDP figures have often been a trigger for Banxico to cut interest rates,” she said.
Eurozone
The coming week is a quiet one for eurozone data. However, investors will take careful note of any evidence of how the eurozone economy is performing, particularly given that markets are pricing in two interest-rate hikes from the European Central Bank in 2026, with a risk of a third, LSEG data showed.
The ECB left rates on hold at its recent meeting in a unanimous decision, although a rate increase was debated.
Weak economic data which point to limited second-round effects of high energy prices could temper rate-hike expectations.
The final reading of French, German and eurozone purchasing managers’ indexes on manufacturing activity for April are due Monday, with the equivalent surveys on services due Wednesday.
Eurozone producer prices data for March on Wednesday will give an indication of pipeline inflationary pressures following a jump in energy prices. Eurozone retail sales figures for March are released Thursday. German March manufacturing orders are also due Thursday, followed by German March industrial production on Friday.
Germany will offer 1.5 billion euros in April 2029 green Bobl and February 2035 green Bund on Tuesday and 3.5 billion euros in November 2032 Bund on Wednesday.
Austria will hold an auction on Tuesday. Spain and France will do so on Thursday.
U.K.
U.K. economic data are thin on the ground in the coming week, with U.K. markets closed Monday for a public holiday. The final reading of the U.K. purchasing managers’ index on services activity during April will be released Wednesday, while the Halifax house-price survey for April is due Friday.
Focus could center on U.K. local elections on Thursday, where the ruling Labour Party is expected to perform poorly. Investors are concerned that this could result in Prime Minister Keir Starmer being replaced and that any successor could favor increased public spending.
“Renewed speculation over a leadership challenge may emerge [after the election], with nerves buffeting gilts and sterling, on the basis that a new leadership team could dilute its commitment to fiscal stability,” Investec economist Philip Shaw said in a note.
The U.K. will sell September 2035 gilts on Wednesday.
Scandinavia
Central banks in Sweden and Norway announce interest-rate decisions on Thursday.
There is a possibility that Norway’s Norges Bank could raise its key policy rate by 25 basis points to 4.25% after the central bank said in March that it would “likely be appropriate” to raise the rate at one of the forthcoming monetary policy meetings.
“The rate committee at Norges Bank fears that confidence in monetary policy is weakening, and that households and firms no longer assume that inflation will decline towards the target of 2%,” said Danske Bank analysts in a note. They expect a rate increase.
Nomura economists expect rates to be held at 4.0% to allow more time to assess the situation. However, they highlighted that there is a “high risk of a hike” in May. If rates are left unchanged, they expect rates will increase in June, they said.
Sweden’s Riksbank is widely expected to leave rates on hold at 1.75%.
“The focus will instead shift to the guidance, where we anticipate that they will leave the door open for, but not explicitly signal, rate hikes this year,” Danske Bank analysts said.
Denmark and Sweden will hold bond auctions on Wednesday.
Poland
Poland’s central bank announces its interest rate decision on Wednesday.
Inflation unexpectedly rose to 3.2% in April and ING estimates core inflation reached 2.9%. The continued increase in core inflation could raise some concerns among some policymakers, ING economists said in a note.
“Nevertheless, we expect policymakers to maintain a wait-and-see stance and to continue monitoring incoming economic data to assess the scale of the current energy shock’s impact on price trends and economic activity.”
The National Bank of Poland will therefore likely keep rates unchanged although the tone of its statement could signal readiness to raise rates if needed, they said.
Switzerland
Swiss inflation data for April are due Tuesday.
Japan
The Bank of Japan is scheduled on Thursday to release minutes of its March meeting, where it kept its policy rate unchanged at 0.75%. The central bank again stood pat in April, while raising its inflation forecasts and reaffirming its stance to pursue further interest-rate increases.
Japan’s financial markets will be closed for the “Golden Week” holidays from Monday through Wednesday, with no major data releases or central bank events scheduled.
Investors continue to watch the yen after it briefly breached the 160 level against the dollar.
China
Another gauge of services activity and trade data are the main events in a quiet week for China, whose economy has so far shown resilience to the energy shock triggered by the Middle East conflict.
Services momentum has lagged the manufacturing rebound seen across regional PMI surveys, and economists expect this trend to persist as consumer demand remains weak.
A trio of already released PMIs–both official and private–highlighted China’s two-speed economy and vulnerability to any global downturn that might materialize if the Iran war is prolonged, said Allen von Mehren at Danske Bank. The surveys also showed a continued rise in price pressures but also moderately encouraging employment, which von Mehren highlights as key to improving consumption growth.
“On balance, the data shows no urgency to increase stimulus. But if external demand starts to weaken, more policy support will be needed,” the economist said.
Trade figures on Saturday meanwhile will likely show a sharp uptick in export growth during April, even as the conflict disrupts trade routes and shipping.
DBS economists expect export growth to accelerate to 8.4% in April from 2.5% in March, noting that container ship deadweight tonnage at 20 major ports rose during the period.
Markets may also monitor consumption and travel data as it is released during the holiday-shortened week, ING economists say, watching spending patterns for signs of how consumer sentiment is faring.
Australia / New Zealand
The week ahead in Australia will center on the Reserve Bank of Australia’s policy meeting, with economists expecting the central bank to deliver a third rate increase this year.
The RBA board could again be split, as it was in March, but most economists believe the case for another hike–and for the central bank to maintain a hawkish stance–remains strong.
Inflation is expected to peak near 5.0% in the second quarter, and the RBA’s updated forecasts are likely to reflect this, alongside rising unemployment and slowing GDP growth.
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05-01-26 1126ET