Next week, attention will turn to several important economic reports. We will see the US CPI report, China’s inflation and trade data, and the UK’s jobs, GDP, and spending review. Equity traders will also keep an eye on Apple’s Worldwide Developers Conference (WWDC). On Monday, China’s inflation data is expected to show an annual CPI drop to -0.2% from -0.1%, with a month-on-month figure holding steady at -0.1%. The previous data indicated a 0.1% year-on-year decline, highlighting ongoing deflation due to lower domestic demand and high US tariffs affecting manufacturing. Also on Monday, China’s trade surplus is projected to grow to USD 101.3 billion from USD 96.18 billion. Exports are expected to rise by 5%, while imports may decrease by 0.9%. In April, exports increased by 8.1%, and imports saw a minor drop of 0.2%. Apple’s WWDC kicks off on Monday and will reveal updates across various platforms, despite challenges like tariffs and AI development. Anticipated updates include enhancements for iOS, macOS, and new hardware features. On Tuesday, the UK jobs report is expected to show a slight unemployment increase to 4.6%, while wage growth is predicted to remain at 5.5%. Previous reports indicated a slow down in job growth and a minor cooling in wages. The US CPI report on Wednesday is forecasted to show a +0.2% rise for the month, with the core rate increasing to +0.3%. Analysts are particularly interested in how tariffs may affect consumer prices after the rises seen in April. Thursday’s UK GDP data is anticipated to reveal a -0.1% contraction for April, after a previous growth of 0.2%. This trend is likely influenced by earlier tariff actions, affecting production decisions. Next week is packed with significant data that will influence short-term pricing in key markets. With inflation figures from major economies, relevant USD trade balance from Asia, and insights from the UK’s economic activities, the reaction across futures and options markets may be quite pronounced. China’s CPI release is likely to confirm the weakness in domestic demand. Even with a small annual decline expected, ongoing monthly deflation shows a lack of pricing pressure in consumer-heavy sectors. Combined with ongoing restrictions in global supply and less demand for inputs, manufacturers are passing on fewer costs or even lowering final prices. We anticipate that the softness in China’s CPI will impact pricing for industrial metals and equities linked to trade. The trade balance data from China adds another layer. Predictions indicate a robust surplus near USD 101 billion. The export sector seems to be holding up, supported by low base effects, while internal buying remains weak. This situation suggests that domestic supply chains are still struggling, but international buyers continue to source actively despite policy tensions. This could lead to volatility in products linked to global freight, showing potential mismatches between expectations and reality. We are also closely monitoring Apple’s WWDC—not only for product launches but for the wider sector implications. Cook’s team has hinted at several AI-related updates, and associated semiconductor stocks are priced for greater swings than previous events. This could create opportunities for intraday trading or calendar spreads for tech investors. Over in the UK, Wallace’s wage and employment data arrives Tuesday morning, potentially affecting short-term gilt and FTSE contracts. While unemployment trends upwards, steady earnings indicate inflation pressures are still present in the service sector. This scenario makes a June or August base rate cut less appealing to policymakers. Any gaps between official figures and market expectations could lead to significant movements in interest rate derivatives. Midweek, all eyes will be on the US inflation figures. Consumer price growth is a key factor affecting broader index movements, especially for sectors sensitive to interest rates like consumer discretionary and tech. Powell has emphasized that externally sourced costs, like tariffs, play a crucial role now more than ever. This influences perceptions of the Fed’s approach and the volatility seen in rate derivatives heading into Q3. If the core CPI rises by another 0.3%, especially driven by durable goods or services, we could see a brief spike in volatility as FOMC outlooks are reassessed. Finally, we’ll be watching the UK’s GDP report on Thursday, focusing on the growth stall in April. This small contraction highlights concerns that construction and manufacturing sectors still feel the effects of last year’s decline. Early quarter tariffs might have affected input choices and delayed export deliveries. This softness may lead to steadier pricing for forwards and lower revision risks through summer, suggesting that flat curves in sterling assets could persist for a while. Overall, the week ahead presents tightly grouped data across multiple time zones. We will focus on how forward-looking markets adjust based on actual performance. By remaining responsive to both headline and detailed shifts, there are opportunities to capture gains, particularly in cross-asset positioning.

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