Inflation Drumbeat Persists for Unnerved US Consumer

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Trade-sensitive manufacturing and wholesale sales are expected to rise in March as the Middle East war drove up energy prices. Statistics Canada’s flash estimate suggested factory sales jumped 3.5% that month, while wholesales were up 1.3%. Michelle Alexopoulos, external deputy governor at the Bank of Canada, will give a speech.

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Elsewhere, aside from US President Donald Trump’s planned visit to Beijing for a high-stakes summit with counterpart Xi Jinping, inflation numbers from China and India to Brazil, and UK growth data will be among the highlights.

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Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

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Asia

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The week kicks off on Monday with an update on China’s price trends. Consumer inflation is expected to have cooled in April to 0.8% as personal consumption stayed soft. After turning positive in March for the first time in 41 months, factory-gate price growth is seen accelerating in April to 1.8% on the back of higher energy prices, the quickest since August 2022. 

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India releases inflation data for April the next day, after prices climbed in March at the fastest clip in a year.

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Also on Tuesday, Australia hands down its annual budget, aiming to tackle intergenerational inequality and moribund productivity, as well as cushion the blow of rising energy and borrowing costs. That comes in the evening, hours after the release of a pair of gauges that may show Australian sentiment remains grim. 

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The Westpac consumer confidence index for May comes after the gauge slid in April to the lowest since August 2020, while data from National Australia Bank will show how business confidence fared in April after it slumped in March to the lowest in almost six years. Australia also publishes a first-quarter wage data figures on Wednesday. Price pressures prompted another rate hike from the central bank on May 5. 

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Japan’s household spending data for March, due on Tuesday, will show whether steps by the government to mitigate the soaring cost of living are starting to revive outlays after three straight months of declines. 

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On Friday, New Zealand releases its manufacturing PMI for April after the index fell for a third straight month in March, even while staying in expansionary territory. Monthly food prices will also be released, and India publishes trade figures along with its April unemployment rate.

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No rate decisions are due in Asia, but several speaking engagements of note by central bankers are on the calendar.  

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Reserve Bank of New Zealand Governor Anna Breman appears on a panel on Tuesday, where she may give her thoughts on whether short-term inflation is likely to feed into more persistent price pressure. Pricing in the rate swaps market indicates a small chance of a hike at the next RBNZ decision on May 27. 

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Two Bank of Japan officials deliver speeches. Board Member Kazuyuki Masu and Deputy Governor Ryozo Himino both voted with the majority to hold settings steady last month. Traders see a 65% chance of a hike on June 16.

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Europe, Middle East, Africa

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The UK will draw a lot of attention. In the aftermath of a key electoral test for embattled Prime Minister Keir Starmer, King Charles III is set to announce the government’s legislative agenda on Wednesday at the opening of parliament. 

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Meanwhile, first-quarter gross domestic product is due on Thursday, and economists anticipate the numbers to show a growth spurt of 0.6%, the fastest pace in a year.