(Bloomberg) --
Reports in the coming week may give the fullest reading to date of how major economies are faring with trade disruptions, halfway through President Donald Trump’s 90-day hiatus on so-called reciprocal tariffs.
Chinese consumer and industry data on Monday will be followed by purchasing manager indexes on Thursday from around the world, pointing to the growth impact from the policy of widespread US levies — unveiled by Trump on April 2, then put on hold on April 9.
A collective view of the fallout could emerge from Group of Seven finance ministers, depending on whether they can agree on a communique when they meet in Canada starting on Tuesday.
The European Commission, meanwhile, will release economic forecasts on Monday, while an appraisal of the impact on financial stability will come from the European Central Bank two days later.
With PMI numbers for April already pointing to a slowdown in global growth to a 17-month low, the combined picture of the week’s events and reports will showcase the extent of nervous shock still reverberating from Trump’s attempt to rewire the global trading system.
While the Chinese data are for April, S&P Global’s PMI numbers are for May, offering an initial take on activity in economies including Australia, Japan, the euro zone, the UK and the US. The collection timetable for those surveys means they’ll capture the tariff de-escalation between Washington and Beijing agreed after talks in Switzerland.
“The international trading environment clearly remains highly uncertain amid worries over the impact of the surviving tariffs levied by the US and mainland China, which are widely expected to dampen global growth and raise inflation,” Chris Williamson and Jingyi Pan, economists at S&P Global, said in a report.
What Bloomberg Economics Says:
“April import prices suggest the US side is continuing to pay most of the cost of tariffs so far. While we don’t know much about how trade patterns shifted in April, import-price indexes that exclude the cost of tariffs have been little changed since the start of the year. This suggests US importers are paying essentially the same price they would have paid in the absence of tariffs, plus the tariff.”
—Chris G. Collins and Anna Wong, economists. For full analysis, click here
With commercial relationships around the world still in flux as the US conducts negotiations to set tariff levels, there’s already evidence of distortions that even the anticipation of Trump’s trade onslaught inflicted on businesses.
Data on Friday, for example, revealed that European Union exports to America shot up by almost 60% in March from a year earlier in frontloading of shipments before his tariff announcement.
Elsewhere, housing data in the US, inflation releases from Japan to the UK to Canada, a likely interest-rate cut in Australia and minutes of the ECB’s April decision are among the highlights.
US and Canada
The US economic calendar lightens up considerably. On Thursday, in addition to weekly jobless claims data, S&P Global will issue its preliminary May survey of manufacturing and service providers.
Based on economists’ projections, industrial weakness probably continued while growth in services activity may have picked up slightly.
Also Thursday, National Association of Realtors data are expected to show a modest increase in sales of previously owned homes, based on closings. The following day, a government report is projected to show a decline in contract signings for new homes, adding to evidence the housing market is struggling for traction.
Investors will monitor a number of speeches by Federal Reserve policymakers as they look for clues on whether officials are any closer to lowering rates after the latest tame inflation figures. Philip Jefferson, John Williams, Alberto Musalem and Beth Hammack are among US central bankers scheduled to speak.
Meanwhile, markets will be watching any fallout from Moody’s Ratings stripping the US of its last top credit assessment. Speaking to NBC’s Meet the Press with Kristen Welker on Sunday, Treasury Secretary Scott Bessent downplayed concerns over the US’s government debt, calling Moody’s a “lagging indicator.”
Turning north, aside from the G-7 meeting in Banff, the Bank of Canada expects April inflation on Tuesday to have slowed to 1.5% amid lower oil prices and the end of the consumer carbon tax. While that’s below its 2% target, the central bank stepped to the sidelines last month amid US trade uncertainty, and remains worried about tariffs reigniting price pressures.
Weak economic data have still spurred traders in overnight swaps to boost bets on a June rate cut to nearly 70%. Retail sales for March may reflect consumers rushing to buy cars before auto tariffs took hold, while the flash estimate for April may show a spending pullback.
Asia
Asia has a packed calendar, headlined by a wave of data from China and Japan, as well as a closely-watched rate decision in Australia.
The week begins with readings on the health of China’s economy, with retail sales seen stronger in April, industrial production likely slowing after what had briefly been triple-digit tariffs, and the unemployment rate staying pat. Property investment is expected to have declined again in April as a real estate rebound proves elusive. Beijing is also expected to cut its benchmark one- and five-year loan prime rates later in the week.
Australia takes center stage on Tuesday with the Reserve Bank’s rate decision. Markets anticipate a 25 basis-point cut, bringing the cash rate to 3.85%, as inflation continues to ease and trade risks recede following the US-China tariff truce. Traders will also parse the accompanying statement for shifts in the growth and labor market outlook.
Japan releases a slew of major indicators from across the economy, beginning midweek with exports and imports, machine orders, and PMI — all of which will provide a steer on the global effects of Trump’s trade war. Friday brings national consumer prices, which are set to remain elevated at 3.5%, and department store sales, which declined in the prior month.
A number of countries report trade figures that will provide a look at how Asia started to adjust in April after Trump first announced his “Liberation Day” tariffs.
They include Malaysia on Tuesday, and Taiwan with export orders on Tuesday plus industrial production later in the week. Thailand, which reports gross domestic product Monday, is expected to release their trade data at some point from Wednesday.
Elsewhere, India’s PMI is due on Thursday, and Singapore is set to report largely unchanged April consumer prices and slightly weaker GDP growth later in the week.
Europe, Middle East, Africa
UK inflation on Wednesday will be a highlight. All economists surveyed by Bloomberg reckon annual consumer-price growth accelerated in April, with the median forecast at 3.3%, the fastest in more than a year, after an increase in regulated energy costs.
Services inflation, watched closely by the Bank of England for signs of domestic price pressures, is set to remain stubbornly high at close to 5%, keeping monetary policy on track for only a cautious easing.
Meanwhile, retail sales data are due on Friday, pointing to the health of the consumer after an unexpected first quarter growth spurt partly driven by services.
In the euro zone, aside from the EU Commission’s rescheduled forecasts on Monday and PMI numbers on Thursday, consumer confidence on Tuesday and a euro-area indicator of negotiated wages on Friday may be the highlights.
The ECB will release its latest financial stability review on Wednesday and its account of the April 17 rate decision the following day. Among several appearances by officials, chief economist Philip Lane is scheduled to speak a couple of times.
In an interview with La Tribune Dimanche, ECB President Christine Lagarde said that she is “not at all pessimistic” on he state of Europe’s economy.
“Employment is holding up, purchasing power is improving, and inflation is falling,” she said. “Consumption and investment should pick up, even if the uncertainties generated by the US administration’s announcements weigh on confidence and slow this recovery.”
Elsewhere, Swiss National Bank President Martin Schlegel will make remarks in Lucerne on Monday.
Italy may draw attention at the end of the week, when both Moody’s Ratings and Scope Ratings are scheduled for potential updates, and could join other credit assessors in improving their views of the country’s borrowing status.
South African Finance Minister Enoch Godongwana will make a third attempt to pass a budget in Cape Town on Wednesday. Previous iterations failed because of coalition disagreements, and investors will watch to determine whether tensions within the ruling alliance persist, and if Godongwana holds the line on fiscal consolidation.
Some central bank decisions are on the calendar:
Latin America
Chile posts its first-quarter output report on Monday, the third economy among the region’s big six to do so. Growth all but certainly slowed from October-December’s 4% reading.
Brazil’s March economic activity may show a slight loss in momentum from February’s 4.1% year-on-year and 0.44% month-on-month readings as the central bank’s aggressive tightening campaign begins to cool Latin America’s biggest economy.
Beyond the weekly market readout of economists published by Brazil’s central bank on Monday, Banco Central de Chile’s survey of traders and Citi’s survey of economists in Mexico are also on tap.
Wednesday’s March GDP-proxy data from Argentina may show the first month-on-month decline since last April as consumer confidence wobbled. Even so, South America’s No. 2 economy is widely forecast to be the growth leader among the region’s big economies this year and next.
The central banks of Uruguay and Paraguay both hold rate meetings. The former may take a pause after three straight quarter-point hikes, while the latter isn’t expected to change rates in 2025.
Mexico delivers its mid-month consumer prices report, March retail sales and final first-quarter GDP, which will fill in a lot of blanks from the flash report posted in late April. Analysts have pushed up their one-year recession probability forecast to the highest since mid-2020.
Inflation has been running just under the 4% ceiling of the central bank’s target range since late December, and the early consensus has early May readings remaining in the tolerance range yet again.
--With assistance from Tom Rees, Vince Golle, Brendan Murray, Carla Canivete, Katia Dmitrieva, Laura Dhillon Kane, Mark Evans, Monique Vanek and Robert Jameson.
(Updates with Bessent in US section)