Next week, important economic data will be released, focusing on inflation in the US and Canada. In the US, the Consumer Price Index (CPI) is expected to rise, with both Core CPI and headline CPI predicted to be 0.3% month-over-month (m/m). The year-over-year (y/y) CPI is forecasted to increase to 2.6%, up from 2.4%. In Canada, the inflation report forecasts a headline CPI of 0.2% m/m, while the Median and Trimmed CPI remain steady at 3.0% y/y. The Bank of England will be in the spotlight as Governor Bailey speaks at a financial dinner in London. The UK CPI is expected to stay at 3.4% y/y. In the US, Producer Price Index (PPI) figures are likely to rise slightly, with Core PPI at 0.2% m/m and headline PPI at 0.3%. These figures will provide insight into inflation pressures ahead of the Personal Consumption Expenditures (PCE) data later this month, which the Federal Reserve prefers as an inflation measure.

Australia Economic Insights

Australia’s job market shows signs of improvement, with an expected addition of 21,000 jobs and an unemployment rate remaining at 4.1%. US retail sales and jobless claims will indicate consumer spending and labor market health, with Core Retail Sales expected to rise by 0.3% m/m and jobless claims projected to increase to 234,000. China will also release economic data, predicting a GDP growth rate of 5.1% y/y, indicating a slight slowdown, while New Loans are set at 1,960 billion, showing increased credit support. We are entering a busy week of data and speeches that will affect market trends, especially those related to interest rates and inflation. With inflation reports from both the US and Canada coming out, and Central Bank comments following closely, expectations are tightening, and there is little room for variation. Starting with North American price changes, the yearly US inflation rate moving to 2.6% from 2.4% indicates strengthening momentum. Both headline and core inflation increasing by 0.3% m/m is significant, especially for those watching potential changes in short-term interest rate forecasts. The rise in retail sales by 0.3% amid increasing jobless claims suggests consumers remain resilient for now. However, the increase in jobless claims hints at some underlying softness—issues that may not be immediately visible but are worth noting. The release of pricing and employment data so close in time warrants careful attention. An above-previous PPI reading indicates that supplier-level price increases are gradually affecting the broader consumer landscape. It’s not just about current pricing; it’s also about whether producer data will influence expectations for future acceleration. These outcomes are interconnected—what happens now sets the stage for the upcoming PCE release, which could guide policy decisions as we head into summer.

Canada And UK Economic Outlook

In Canada, the outlook is stable. Although median and trimmed measures remain unchanged, the month-on-month increase suggests some renewed pressure on household expenses. The stability in core data may prevent central policymakers from overreacting, but a slight rise will be closely monitored alongside emerging growth data. Now, looking at the UK, steady inflation forecasts suggest a pause in recent trends. If these figures remain unchanged, Bailey’s comments—given at a formal London dinner rather than a press conference—will carry extra importance. With stable forecasts, any hints of concern or calm in his speech could significantly influence expectations that have been built over the past month. Australia’s labor market shows consistent hiring, which, along with steady unemployment rates, points to a balanced growth pace. The job growth isn’t explosive, but it remains steady, keeping options open, a quality often just as valuable as any immediate growth. In Asia, China’s economic data reveals a modest slowdown in growth, which isn’t alarming but indicates it’s not exceeding expectations either. Lending figures are higher, showing local efforts to support credit are effective. Monitoring where the rising loans are directed will be crucial; increasing credit without corresponding activity could indicate a divergence that others might overlook. As we globalize through this data release week, the measures remain straightforward while the forecasts show steady trends. We aren’t merely looking for positive or negative surprises but observing whether patterns begin to shift. For now, we rely on incoming data to validate current market prices. Create your live VT Markets account and start trading now.

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