MNI Global Week Ahead - Elections, Inflation, RBA and PMIs

May-18 19:23By: Emil Lundh

See below for the key events in developed and emerging markets next week.

Portugal holds a snap legislative election on 18 May following the successful parliamentary vote of no confidence against the minority government of Prime Minister Luís Montenegro in March. A fractured political landscape makes one party winning a majority in the Assembly of the Republic an unlikely scenario. As such, the formation of a coalition or minority government after the election is set to be required. There is significant focus on the postelection negotiations, given the prospect that the right-wing Chega is involved in supporting a minority administration for the first time.

SUNDAY - Poland Election

Poland will hold the first round of the presidential election on May 18, with the widely anticipated run-off between top two candidates expected on June 1. The head of state has many ceremonial functions, but is also equipped with a strong veto power, with the bar for its overruling by parliament set relatively high. Opinion polling and betting market data suggest that government ally Rafał Trzaskowski holds a lead over his closest rival Karol Nawrocki. Trzaskowski’s victory would give the government more leeway to implement its agenda, while Nawrocki’s win would prolong the existing political deadlock. Exit polls after the first round will be published once the election silence period expires alongside the closure of polling stations at 20:00BST/21:00CEST.

SUNDAY - Romania Election

Pro-EU centrist Mayor of Bucharest Nicusor Dan has overtaken right-wing nationalist George Simion in the betting market probabilities ahead of the second round of the presidential election taking place Sunday, 18 May. Data from Polymarket shows Dan with a 56% implied probability of winning to Simion's 43%. This compares to a 75-25% split in Simion's favour on 6 May, and a 60-40% split in the right-winger's favour just a day ago on 15 May. While polls show a small shift towards Dan, they are still within the margin of error. Moreover, polling in Romania has been hit-and-miss of late, notably in the annulled Dec 2024 first round, where Russophile candidate Cailin Georgescu came from polling sub-10% to winning the first round with 22.9%. As such, the run-off is in effect a dead heat.

MONDAY / TUESDAY - China Data and LPR Decision

There is some key data releases next week that may give some insight into whether policy is beginning to show up in the data. New and Used home prices are scheduled for early in the week with both expected to show continued contraction. Used house prices have not delivered an appreciation since early 2023 and despite policy measures to reduce the cost of borrowing, it is difficult to see a meaningful change in the direction of prices yet. Retail sales for April are released and are expected to soften relative to the prior month but resilient overall. April Industrial production will be released also which is forecast to expand +5.8%. The week is capped off with the decision on the 1 and 5 year Loan Prime Rates. The 1-year LPR serves as a benchmark for most corporate and household loans, while the 5-year LPR is a reference for property mortgages and given recent policy action by authorities, the forecast is for a modest reduction by 10bps for each.

TUESDAY - RBA Decision

The RBA decision is announced on May 20 and is widely expected to cut rates 25bp to 3.85% after Q1 trimmed mean CPI fell within the 2-3% target band. After stronger-than-expected Q1 wages and April employment data, it is likely to retain its cautious tone regarding future easing and reiterate that uncertainty is currently very high. Updated staff forecasts will be published with the meeting statement.

TUESDAY - Canada April Inflation

Canadian CPI is expected by consensus to have decelerated sharply in April to 1.6% Y/Y, from 2.3% in March (M/M NSA: -0.2%, after +0.3%). But the headline deceleration will mainly reflect lower energy prices after the April 1 elimination of the consumer carbon tax and high year-before gasoline base effects. In contrast, core measures are unlikely to show much of a disinflationary pullback if at all: CPI Median is seen steady at 2.9% Y/Y, with CPI Trim likewise unchanged at 2.8%. That should keep core measures tracking close to the Bank of Canada's scenario assumptions for Q2, and as such shouldn't preclude a rate cut at the next meeting in June. Factors to be watched as upside drivers include food and core goods inflation, with any sign of passthrough of a weaker Canadian dollar Y/Y and retaliatory tariffs on the US eyed closely for impacts on import prices.

WEDNESDAY - BI Decision (Indonesia)

Bank Indonesia announces its meeting decision on May 21 and FX stability will remain its focus. It will be pleased that USDIDR is down 1.9% since its April 23 meeting and the IDR NEER up around 1.5%, which with core inflation at the central bank's mid-point may give it confidence to ease this month especially as there are signs of slowing growth.

WEDNESDAY - UK April Inflation

There will be even more focus on next week's UK inflation data than usual. The April data will incorporate a number of bill increases (including water and energy) and annual service price resets, as well as being the month in which the national minimum/living wages increased and the increase in employers' NICs was implemented. The early consensus looks for headline CPI at 3.3%Y/Y (up from 2.6% in March) with core rising from 3.4% to 3.6% and services rising from 4.7% to 4.9%. The BOE forecasts higher numbers - looking for headline at 3.43%, core at 3.77% and services at 5.00%. Note that the BOE has been surprised to the upside in recent years by April inflation numbers, and is concerned in particular about the annual service price resets that usually occur in April/May. This will put a bit more focus on services CPI again this month, but we think in general that the BOE is not just concerned about services CPI (like it was primarily in 2024) as it is concerned about inflation peak around 3.7% (according to its forecasts) later this year. There have been increasing comments from BOE members recently talking about the non-linearities of inflation feeding through to inflation expectations, and also on the fact that household inflation expectations are more focused on energy bills, the weekly supermarket shop and petrol prices than the full inflation basket. This will increase the importance of food price inflation and wider energy impacts later this year. But for both April and May, the big concern for the BOE will be whether the annual price resets are in line with their expectations or not. If there is a large downside surprise here and in May a June cut may be considered again by some members of the MPC. An upside surprise and even quarterly cuts will be called more into question.

THURSDAY - Eurozone May Flash PMIs

The Eurozone data calendar is headlined by the May flash PMIs. The ECB will be watching this data intently. While a June cut appears very likely at this stage, year-end implied rates have drifted higher since Trump's tariff rollbacks, calling into question some analyst expectations of a 1.50% terminal rate (or below). In April, the manufacturing PMI was a little more resilient than might have been expected given the US Liberation Day fallout and associated uncertainty, with a downside surprise instead seen in the services component. In May, consensus expects small improvements in both components. The Eurozone-wide manufacturing PMI is seen at 49.3 (vs 49.0 prior), which would be the highest in over two years. Meanwhile, services is expected to remain in expansionary territory at 50.5 (vs 50.1 prior). That leaves the composite PMI consensus at 50.7 (vs 50.4 prior). Similar dynamics are expected in France and Germany. Note that the German May IFO survey is also due on Thursday, which will provide a more granular breakdown of sentiment in Europe's largest economy.

FRIDAY - Japan April Inflation

The market expects April CPI to print fairly close to the March outcome in Y/Y terms. Headline is projected at 3.5% (versus 3.6% prior), while the core measure is expected to tick up to 3.5%, and the measure which excludes energy as well is forecast at 3.0%. We did see upside surprises from the Tokyo CPI for April. Any upside surprises from the national print is unlikely to shift near term BoJ thinking, as focus is on the trade outlook and recent downside growth and inflation revisions (made at the most recent BoJ meeting).

Date	GMT/Local	Impact	Country	Event
16/05/2025	0140/2140		US	San Francisco Fed's Mary Daly
19/05/2025	-		AU	Reserve Bank of Australia Meeting
19/05/2025	0200/1000	***	CN	Fixed-Asset Investment
19/05/2025	0200/1000	***	CN	Retail Sales
19/05/2025	0200/1000	***	CN	Industrial Output
19/05/2025	0200/1000	**	CN	Surveyed Unemployment Rate M/M
19/05/2025	0900/1100	***	EU	HICP (f)
19/05/2025	1245/0845		US	New York Fed's John Williams
19/05/2025	1245/0845		US	Fed Vice Chair Philip Jefferson
19/05/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
19/05/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
19/05/2025	1715/1315		US	Dallas Fed's Lorie Logan
19/05/2025	1730/1330		US	Minneapolis Fed's Neel Kashkari
20/05/2025	0430/1430	***	AU	RBA Rate Decision
20/05/2025	0600/0800	**	DE	PPI
20/05/2025	0800/1000	**	EU	EZ Current Account
20/05/2025	0800/0900		GB	BOE's Pill At Barclays Briefing
20/05/2025	0900/1100	**	EU	Construction Production
20/05/2025	1000/1200		EU	ECB's Cipollone pre-rec video at Sustainability Festival
20/05/2025	-		EU	ECB's Lagarde and Cipollone at G7 Meeting
20/05/2025	1230/0830	***	CA	CPI
20/05/2025	1230/0830	**	US	Philadelphia Fed Nonmanufacturing Index
20/05/2025	1255/0855	**	US	Redbook Retail Sales Index
20/05/2025	1300/0900		US	Richmond Fed's Tom Barkin
20/05/2025	1400/1600	**	EU	Consumer Confidence Indicator (p)
20/05/2025	2100/1700		US	Fed Governor Adriana Kugler
20/05/2025	2300/1900		US	San Francisco Fed's Mary Daly
20/05/2025	2300/1900		US	Atlanta Fed's Raphael Bostic
20/05/2025	2300/1900		US	Cleveland Fed's Beth Hammack
21/05/2025	2301/0001	*	GB	Brightmine pay deals for whole economy
21/05/2025	0600/0700	***	GB	Consumer inflation report
21/05/2025	0900/1000	**	GB	Gilt Outright Auction Result
21/05/2025	1100/0700	**	US	MBA Weekly Applications Index
21/05/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
21/05/2025	1600/1800		EU	ECB's Lane at Monpol Panel Discussion
21/05/2025	1615/1215		US	Richmond Fed's Tom Barkin, Fed Gov. Michelle Bowman
21/05/2025	1700/1300	**	US	US Treasury Auction Result for 20 Year Bond
22/05/2025	2300/0900	***	AU	Judo Bank Flash Australia PMI
22/05/2025	2350/0850	*	JP	Machinery orders
22/05/2025	0030/0930	**	JP	Jibun Bank Flash Japan PMI
22/05/2025	0600/0700	***	GB	Public Sector Finances
22/05/2025	0645/0845	**	FR	Manufacturing Sentiment
22/05/2025	0715/0915	**	FR	S&P Global Services PMI (p)
22/05/2025	0715/0915	**	FR	S&P Global Manufacturing PMI (p)
22/05/2025	0730/0930	**	DE	S&P Global Services PMI (p)
22/05/2025	0730/0930	**	DE	S&P Global Manufacturing PMI (p)
22/05/2025	0800/1000	***	DE	IFO Business Climate Index
22/05/2025	0800/1000	**	EU	S&P Global Services PMI (p)
22/05/2025	0800/1000	**	EU	S&P Global Manufacturing PMI (p)
22/05/2025	0800/1000	**	EU	S&P Global Composite PMI (p)
22/05/2025	0830/0930	***	GB	S&P Global Manufacturing PMI flash
22/05/2025	0830/0930	***	GB	S&P Global Services PMI flash
22/05/2025	0830/0930	***	GB	S&P Global Composite PMI flash
22/05/2025	1000/1100	**	GB	CBI Industrial Trends
22/05/2025	1050/1150		GB	BOE's Breeden On Climate Panel
22/05/2025	1100/1200		GB	BOE's Dhingra On UK Productivity Panel
22/05/2025	1130/1330		EU	ECB April Minutes Released
22/05/2025	1230/0830	***	US	Jobless Claims
22/05/2025	1230/0830	**	US	WASDE Weekly Import/Export
22/05/2025	1230/0830	*	CA	Industrial Product and Raw Material Price Index
22/05/2025	1230/1330		GB	BOE's Pill At MonPol Conference
22/05/2025	1300/1500	**	BE	BNB Business Confidence
22/05/2025	1345/0945	***	US	S&P Global Manufacturing Index (Flash)
22/05/2025	1345/0945	***	US	S&P Global Services Index (flash)
22/05/2025	1400/1000	***	US	NAR existing home sales
22/05/2025	1400/1000	*	US	Services Revenues
22/05/2025	1430/1030	**	US	Natural Gas Stocks
22/05/2025	1500/1100	**	US	Kansas City Fed Manufacturing Index
22/05/2025	1500/1700		EU	ECB's Elderson Dinner Speech at Biodiversity Day
22/05/2025	1535/1735		EU	ECB's de Guindos Speech in Madrid
22/05/2025	1700/1300	**	US	US Treasury Auction Result for TIPS 10 Year Note
22/05/2025	1800/1400		US	New York Fed's John Williams
22/05/2025	1900/1500		US	New York Fed's Roberto Perli
23/05/2025	2301/0001	**	GB	Gfk Monthly Consumer Confidence
23/05/2025	2330/0830	***	JP	CPI
23/05/2025	0600/0800	**	SE	Unemployment
23/05/2025	0600/0700	***	GB	Retail Sales
23/05/2025	0600/0800	***	DE	GDP (f)
23/05/2025	0645/0845	**	FR	Consumer Sentiment
23/05/2025	0830/1030		EU	ECB's Lane Inflation Lecture in Florence
23/05/2025	1230/0830	*	CA	Quarterly financial statistics for enterprises
23/05/2025	1230/0830	**	CA	Retail Trade
23/05/2025	1230/0830	**	CA	Retail Trade
23/05/2025	1400/1000	***	US	New Home Sales