The upcoming week will feature key economic data, such as Australian labour market statistics and U.S. inflation and retail sales figures. Monday anticipates minimal activity, whereas Tuesday will see Japan’s BoJ summary, U.K.’s claimant count, earnings index, and unemployment rate, alongside U.S. inflation data. On Wednesday, Australia will reveal its wage price index, with Thursday bringing its employment change figures, and the U.K. disclosing GDP data. The U.S. will focus on PPI, retail sales, and jobless claims, with Fed Chair Powell speaking at a conference.

In the U.S., core CPI m/m is anticipated at 0.3%, up from 0.1% last month, with CPI y/y steady at 2.4%. Recent inflation readings were influenced by volatile sectors like energy and travel. Analysts suggest tariff effects, notably on auto prices, may begin to drive core goods inflation. Though, full tariff impacts remain unseen.

Australian Labor Market Update

Australia’s wage price index is expected at 0.8% q/q, slightly above the previous 0.7%, but wage growth remains subdued. Employment is projected to rise by 20.9K, with unemployment steady at 4.1%. The labour force participation rate has shifted from a peak of 67.2% to 66.7–66.8%, aligning with softer population growth.

In the U.S, retail sales are forecasted flat at 0.0% m/m, after a 1.4% prior increase. Recent gains in retail sales, driven by vehicle purchases anticipating tariffs, signal strong consumer momentum. Future spending depends on whether March’s strength represented front-loaded demand, with auto sales suggesting continued robustness.

Markets look poised for a week shaped by a busy data calendar, and a clearer picture will emerge as we move through key regional releases. With price pressures still drawing market attention, Tuesday’s U.S. inflation figures could provide a valuable gauge of where we stand. The marginal rise expected in monthly core inflation—up to 0.3% from 0.1%—reflects the impact of more persistent categories. While energy prices and travel costs remain unpredictable, developments in auto prices, connected to tariff changes, are beginning to influence the broader data backdrop more noticeably. We see this as a prelude to firmer goods-related inflation later in the year.

Retail conditions, particularly in the States, are becoming more uneven. After unusually strong data in March—likely fuelled by early vehicle purchases prompted by tariff warnings—the flat print now anticipated signals a potential shift. The key point here isn’t weakness in demand, but whether earlier enthusiasm cannibalised future spending. If shoppers pulled forward purchases, we might see quieter months ahead, especially in durable goods. Still, the strength in underlying metrics, such as non-auto categories, will offer more ground-level insight on true household sentiment.

Fed Chair Powell’s Remarks

Powell’s remarks on Thursday will tie together the week’s broader themes. Recent speeches have signalled caution, not least because inflation is proving stickier than first projected. We’ll be watching closely for any indication on how policymakers plan to respond to sustained consumer activity or an uptick in prices driven by imported goods costs. Following the last Fed meeting, where the path forward was left largely unchanged, comments delivered this week could either reinforce expectations or unsettle near-term rate bets.

In the U.K., the focus will turn to the labour market, which has begun to show early stages of slack. Tuesday’s employment and earnings data will help confirm whether the recent uptick in jobless claims marks a broader trend. Of particular interest will be the pace of wage growth—higher average earnings may signal inflation risks that haven’t yet worked through the system. GDP data out Thursday may reinforce this view if domestic output keeps losing pace relative to services costs. Should the domestic trend continue, it adds support to the likelihood of monetary easing down the road.

Meanwhile, Australia remains a study in balance. Despite limited wage gains—the expected quarterly reading is barely up from the previous figure—employment growth continues at a moderate pace. At face value, a 20.9K jobs gain with steady unemployment appears healthy, but waning population growth has distorted headline results. Participation is subtly declining, hovering below its own recent peak, masking the softness beneath. Any deviation this week, in either the wage price index or employment change, may quickly feed into rate expectations for the Reserve Bank.

In Japan, central bank minutes released Tuesday may generate some local market moves, particularly if there are any signs of surprise disagreement among monetary authorities. Given attempts to gradually shift away from ultra-loose policy, even modest changes can ripple across yen positioning. Although volumes are typically light earlier in the week, headline-sensitive conditions mean thin trading may lead to outsized moves.

Overall, this week presents a series of measured tests. Reaction will depend not only on the numbers themselves but also on how markets digest the broader implications—whether inflation remains persistent enough to deter cuts, whether growth is slowing without a safety net, and whether consumers have truly adjusted their behaviour ahead of time.

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