This article will analyze the market trends in the upcoming week, focusing on the impact of US inflation data on the market. As the U.S. non-farm report in May is digested, the market will closely monitor the upcoming economic data, including U.S. inflation, UK employment and GDP. These data will provide investors with important market signals.
Monday
The market continued to digest the US non-agricultural report in May, while paying attention to the Sino-US trade talks being held in London today. In terms of data, we focus on the wholesale sales in the United States in April and the New York Fed's one-year inflation expectations in May. The latter changes will partially reflect the impact of tariffs. If the data shows that inflation expectations continue to rise, it will likely affect U.S. consumption and economic outlook.
Tuesday
Follow the UK employment report during the European period. The previous value shows that as the job market continues to slow, the UK's unemployment rate has risen to its highest level in nearly four years and wage growth has also slowed down in the three months to the end of April. If the cooling trend continues, it may allow the Bank of England to continue to maintain its tendency to cut interest rates. Yet hawks at the Bank of England will still consider suspending interest rate cuts due to strong wage growth. In the evening, the U.S. NFIB Small Business Confidence Index is expected to start recording stable.
Wednesday
This week's key market trends will usher in the announcement of the US CPI in May. The monthly CPI rate is expected to maintain a moderate growth of 0.2%, while the annual core CPI rate is expected to accelerate slightly to 2.9% (the previous value is 2.8%). The CPI annual rate in April was the lowest since February 2021. If the latest data remains relatively stable, it will help ease the Fed's recent concerns about a rebound in inflation, and June is more likely to remain silent. We will be following our inflation report forecast on Wednesday.
Thursday
The United States will announce its May PPI to continue to supplement Wednesday's inflation. Pay attention to whether the annual PPI rate has stopped slowing down for the fourth consecutive month and returns to positive growth, reflecting the possibility of inflationary pressure rising again. During the European period that day, the UK will release its GDP, manufacturing and industrial output reports in April. Although the UK economy rebounded in the first quarter, economists are skeptical of whether the UK economy can continue to rebound based on the negative impact of Trump's tariffs. Previously, the OECD has lowered its forecast for UK GDP growth in 2025 to 1.3%. Therefore, the pound needs an economic report that exceeds expectations to drive a rebound in confidence. Last week, Bank of England President Bailey said that as global trade policy turmoil increasingly casts a shadow on the outlook, he will adhere to the "gradual and cautious" interest rate cut policy.
Friday
Data in various countries is relatively scattered. During the European period, you can pay attention to the final value of Germany's May CPI. The initial value shows that Germany's annual inflation rate remains unchanged at 2.1%, the same as April and the lowest level since October 2024, thus supporting the ECB's decision to cut interest rates last week. But more focus will be on the initial value of the University of Michigan Consumer Confidence Index in June. Previous data have experienced five consecutive months of declines, falling to its lowest level since June 2022. The market will pay attention to whether the latest data has stopped at a continuous slowdown due to the slight easing of the tariff situation in the near future, but based on policy uncertainty, there is no significant rebound.
