MNI Global Week Ahead - Fed, BOE and Scandi Decisions

May-04 18:05By: Emil Lundh

See below for the key events in developed and emerging markets in the week ahead:

Developed Markets

WEDNESDAY - New Zealand Q1 Labour Market Data

NZ Q1 labour market data print on Wednesday May 7 and are likely to show a pickup in the unemployment rate but a stabilisation in job shedding. The RBNZ is forecasting a 0.1pp increase in the unemployment rate to 5.2% and flat employment growth on the quarter. Higher-frequency survey and filled job data suggest that there may even be a slight quarterly increase in jobs. Private wage growth is likely to have slowed further in Q1 allowing the RBNZ to continue easing policy.

WEDNESDAY - FOMC Decision

The FOMC will extend its series of rate holds to a third meeting in May, keeping the Fed funds target rate at 4.25-4.50% while maintaining its forward guidance in the Statement. It has been an eventful six weeks since the prior decision which included escalation and subsequent partial backtracking in US tariff policy, and the impact of uncertainty on economic sentiment (if not yet the “hard” data). As the FOMC awaits clarity in both government policy and the data on the degree to which one if not both dual mandate targets will be missed, most participants will continue to support a holding pattern until there is a clearer signal to act. At the press conference, Chair Powell is likely to warn about the risks to both sides of the dual mandate, while saying something along the lines of "For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance. We continue to analyze the incoming data, the evolving outlook, and the balance of risks." Don’t anticipate any meaningful changes in the Statement, though any signal that the Fed is looking seriously at “soft” survey data to assess the outlook could be significant.

THURSDAY - Riksbank Decision

The Riksbank is expected to keep rates on hold at 2.25% on Thursday. Although the May decision does not include an updated set of macroeconomic forecasts and rate path projection, we still think there is scope to open the door to another rate cut later this year, conditional on downside growth risks materialising. In March, the Riksbank held rates at 2.25% and assessed that rates will likely “remain at this level going forward”. However, the policy statement and subsequent speeches from Executive Board officials have highlighted that the Riksbank is ready to act “if the outlook for inflation and economic activity so requires”. The direct impact and associated uncertainty of US tariffs leaves growth risks tilted to the downside, while the inflation outlook has steadied somewhat over the last month. There likely isn’t enough evidence to move rates to 2.00% this meeting, but we think the case for a June cut is firmly in play.

THURSDAY - Norges Bank Decision

Norges Bank are widely expected to keep policy rates on hold at 4.50% on May 8. Rates have been at this level since December 2023, after the Board opted to go against prior guidance for a cut in March due to an acceleration in inflationary pressures at the start of this year. The May meeting is an interim decision, so does not include an updated MPR or rate path projection. Norges Bank generally avoid sending fresh monetary policy signals at these decisions, so the base case is that current guidance stating “the policy rate will most likely be reduced in the course of 2025” will remain in the policy statement. We do not think there is enough to support a dovish Norges Bank guidance tilt. CPI-ATE inflation remains above 3% and there are not yet signs of deteriorating labour market conditions

THURSDAY - BOE Decision

The Bank of England's MPC meet in the upcoming week for their monetary policy meeting. The decision is due Thursday and it is a quarterly meeting accompanied by an MPR and press conference. Consensus and markets both look for a 25bp cut with a question mark over how many members will vote for a 50bp cut. Since the last meeting, most MPC speakers have stuck to the script of tariffs being negative for growth but that the impact on inflation was unclear. The forecasts in the MPR may give them more to base updated communications on. However, with uncertainty so high, we think there is a good chance that some of the structure of the existing guidance remains. The MNI Markets team expects "restrictive" and "careful" to remain: removing the former would indicate the BOE could cut much more than markets currently price (the MPC probably wouldn't want markets to price in a long and deep cutting cycle) and "careful" is synonymous with uncertainty, which has picked up. This leaves "gradual" as the other buzzword in the guidance. We see a good chance that this word is removed as it would allow optionality for the MPC to speed up the pace of cuts if required, but if "restrictive" remains it would likely stop markets overreacting too much.

Emerging Markets

WEDNESDAY - NBP Decision (Poland)

The Polish central bank is expected to lower interest rates for the first time since October 2023, following up on forward guidance from last month's press conference. A streak of dovish data prompted consensus to converge around a 50bp reduction, a scenario now baked into money markets. The accompanying rhetoric will be closely watched, with the MPC set to debate whether to frame the move as a one-off adjustment and leave its options open, or announce the launch of an easing cycle.

WEDNESDAY - CNB Decision (Czechia)

The CNB remains in fine-tuning mode as the policy rate approaches neutral levels. Recent rhetoric signalled growing caution about further easing, even as there may still be some scope for cuts. Flash April CPI, due on the eve of the rate decision, may feed into the Bank Board's discussion. Alongside the rate decision, the CNB will provide an updated set of macroeconomic forecasts, which will shed more light on the outlook.

WEDNESDAY - Copom Decision (Brazil)

The BCB is expected to continue its tightening cycle in May, with analyst forecasts coalescing towards a 50bp hike, taking the Selic rate to 14.75%. This would be in line with prior guidance, indicating the Copom would slow the tightening pace, from the prior 100bp increments. Governor Galipolo recently said the board is responding to an inflation dynamic that is challenging, however, given an uncertain external outlook that demands caution and a well behaved BRL, a smaller 25bp hike should not be ruled out.

THURSDAY - BNM Decision (Malaysia)

There are limited expectations for an interest rate cut in Malaysia as the Central Bank - Bank Negara - meets next week on May 8th. At present the survey of economists on Bloomberg has 13 respondents with only two forecasting a cut. It is true that data is showing signs of weakness with first quarter GDP softer than expected at 4.4% (expectations 4.8%) and today's PMI of 48.6 providing eleven straight months of contraction. Malaysia also is not immune to the trade war yet seems quite comfortable with their position. Governor Rasheed stated that monetary policy cannot solve trade wars and that the bank's focus remains on achieving price stability to support sustainable economic growth. The BNM does not state a formal inflation target. Given the last 2 years has seen CPI YoY in a 1.4-2.0 range, it would appear that the BNM are achieving their goal. Malaysia’s bond market seemingly agrees with just 8bps of cuts priced in over the next three months. There appears no apparent need to cut at this juncture and we see the likely scenario as yet another hold of rates at 3.00% where it has been since mid-2023.

THURSDAY - BCRP Decision (Peru)

Analyst expectations point to the BCRP continuing the pause of its easing cycle in May. This would represent the committee’s fourth consecutive hold, keeping the reference rate at 4.75%. However, well behaved inflation data that remains below the mid-point of the target range, a below-expectation growth print for February and the uncertain external environment should keep the option of a 25bp cut on the table.

FRIDAY - China April Trade Data

Trade data in Asia is being poured over for signs of impacts from the trade war. The first quarter has had the dual interruption of China's Lunar New Year holidays and the implementation of tariffs. We have seen examples throughout Asia of exporters rushing to get products shipped prior to the tariff announcement. This week saw the release of China's PMIs and the official (state owned enterprises) has now moved into contraction whilst the CAIXIN (private companies) stayed in expansion, though significantly lower than the month prior. Within the PMI data releases new export orders fell to their lowest levels since December 2022. Additionally, we note that data out on outbound shipments from China to the US indicate that the pace of decline increased towards the end of the month most likely due to tariffs. We anticipate that the headline number for exports should still have remained positive but this data release is likely to be volatile. Authorities have announced measures to support exporters going forward and we are seeing evidence of companies expanding their networks into new markets to broaden their export capabilities. However this will no doubt see exports remain volatile through the mid-point of the year at the very least. Imports will provide some insight into the ongoing improvements in the domestic economy and with March's contraction possibly interrupted by the Lunar New Year, authorities will be looking for a bounce back in imports as a positive sign.

Date	GMT/Local	Impact	Country	Event
05/05/2025	-		GB	Bank of England Meeting
05/05/2025	2300/0900	*	AU	S&P Global Final Australia Services PMI
05/05/2025	2300/0900	**	AU	S&P Global Final Australia Composite PMI
05/05/2025	0630/0830	***	CH	CPI
05/05/2025	0700/0300	*	TR	Turkey CPI
05/05/2025	1345/0945	***	US	S&P Global Services Index (final)
05/05/2025	1345/0945	***	US	S&P Global US Final Composite PMI
05/05/2025	1400/1000	***	US	ISM Non-Manufacturing Index
05/05/2025	1530/1130	*	US	US Treasury Auction Result for 26 Week Bill
05/05/2025	1530/1130	*	US	US Treasury Auction Result for 13 Week Bill
05/05/2025	1700/1300	***	US	US Note 03 Year Treasury Auction Result
06/05/2025	0130/1130	*	AU	Building Approvals
06/05/2025	0145/0945	**	CN	S&P Global Final China Services PMI
06/05/2025	0145/0945	**	CN	S&P Global Final China Composite PMI
06/05/2025	0545/0745	**	CH	Unemployment
06/05/2025	0645/0845	*	FR	Industrial Production
06/05/2025	0715/0915	**	ES	S&P Global Services PMI (f)
06/05/2025	0715/0915	**	ES	S&P Global Composite PMI (final)
06/05/2025	0745/0945	**	IT	S&P Global Services PMI (f)
06/05/2025	0745/0945	**	IT	S&P Global Composite PMI (final)
06/05/2025	0750/0950	**	FR	S&P Global Services PMI (f)
06/05/2025	0750/0950	**	FR	S&P Global Composite PMI (final)
06/05/2025	0755/0955	**	DE	S&P Global Services PMI (f)
06/05/2025	0755/0955	**	DE	S&P Global Composite PMI (final)
06/05/2025	0800/1000	**	EU	S&P Global Services PMI (f)
06/05/2025	0800/1000	**	EU	S&P Global Composite PMI (final)
06/05/2025	0830/0930	**	GB	S&P Global Services PMI (Final)
06/05/2025	0830/0930	***	GB	S&P Global/ CIPS UK Final Composite PMI
06/05/2025	0900/1100	**	EU	PPI
06/05/2025	-		US	FOMC Meeting
06/05/2025	1230/0830	**	CA	International Merchandise Trade (Trade Balance)
06/05/2025	1230/0830	**	US	Trade Balance
06/05/2025	1255/0855	**	US	Redbook Retail Sales Index
06/05/2025	1400/1000	*	CA	Ivey PMI
06/05/2025	1700/1300	**	US	US Note 10 Year Treasury Auction Result
07/05/2025	0030/0930	**	JP	S&P Global Final Japan Services PMI
07/05/2025	0030/0930	**	JP	S&P Global Final Japan Composite PMI
07/05/2025	0600/0800	**	DE	Manufacturing Orders
07/05/2025	0600/0800	***	SE	Flash Inflation Report
07/05/2025	0645/0845	*	FR	Foreign Trade
07/05/2025	0730/0930	**	EU	S&P Global Final Eurozone Construction PMI
07/05/2025	0800/1000	*	IT	Retail Sales
07/05/2025	0830/0930	**	GB	S&P Global/CIPS Construction PMI
07/05/2025	0900/1100	**	EU	Retail Sales
07/05/2025	0900/1000	**	GB	Gilt Outright Auction Result
07/05/2025	1100/0700	**	US	MBA Weekly Applications Index
07/05/2025	1400/1000		US	Treasury Secretary Scott Bessent
07/05/2025	1430/1030	**	US	DOE Weekly Crude Oil Stocks
07/05/2025	1800/1400	***	US	FOMC Statement
07/05/2025	1900/1500	*	US	Consumer Credit
08/05/2025	-		NO	NorgesBank Meeting
08/05/2025	0600/0800	**	DE	Trade Balance
08/05/2025	0600/0800	**	DE	Industrial Production
08/05/2025	0700/0900	**	ES	Industrial Production
08/05/2025	0730/0930	***	SE	Riksbank Interest Rate Decison
08/05/2025	0800/1000	***	NO	Norges Bank Rate Decision
08/05/2025	1100/1200	***	GB	Bank Of England Interest Rate
08/05/2025	1100/1200	***	GB	Bank Of England Interest Rate
08/05/2025	1130/1230		GB	BOE Press Conference
08/05/2025	1230/0830	***	US	Jobless Claims
08/05/2025	1230/0830	**	US	WASDE Weekly Import/Export
08/05/2025	1230/0830	**	US	Preliminary Non-Farm Productivity
08/05/2025	1300/1400		GB	Decision Maker Panel data
08/05/2025	1400/1000		CA	BOC Financial Stability Report and Financial System Survey
08/05/2025	1400/1000	**	US	Wholesale Trade
08/05/2025	1430/1030	**	US	Natural Gas Stocks
08/05/2025	1500/1100		CA	BOC Governor Macklem press conference on Financial System Review
08/05/2025	1700/1300	***	US	US Treasury Auction Result for 30 Year Bond
09/05/2025	2330/0830	**	JP	average wages (p)
09/05/2025	2330/0830	**	JP	Household spending
09/05/2025	0600/0800	***	NO	CPI Norway
09/05/2025	0800/1000	*	IT	Industrial Production
09/05/2025	0840/0940		GB	BOE Bailey Keynote Address at Reykjavik Economic Conference
09/05/2025	1015/0615		US	New York Fed's John Williams
09/05/2025	1045/0645		US	Fed Governor Michael Barr
09/05/2025	1115/1215		GB	BOE's Pill At National MPC Agency Briefing
09/05/2025	-	***	CN	Trade
09/05/2025	1230/0830	***	CA	Labour Force Survey
09/05/2025	1230/0830	***	CA	Labour Force Survey
09/05/2025	1230/0830		US	Fed Governor Adriana Kugler
09/05/2025	1530/1130		US	New York Fed's John Williams
09/05/2025	1530/1130		US	Fed Governor Christopher Waller
09/05/2025	1530/1130		US	Fed Governor Christopher Waller
09/05/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
09/05/2025	1700/1300	**	US	Baker Hughes Rig Count Overview - Weekly
09/05/2025	2345/1945		US	St. Louis Fed's Alberto Musalem
09/05/2025	2345/1945		US	Fed Governor Michelle Bowman
10/05/2025	2345/0145		EU	ECB's Schnabel on Monetary Policy Panel
09/05/2025	2345/1945		US	Cleveland Fed's Beth Hammack
09/05/2025	2345/1945		US	St. Louis Fed President Musalem
09/05/2025	2345/1945		US	Fed Governor Lisa Cook
10/05/2025	0130/0930	***	CN	CPI
10/05/2025	0130/0930	***	CN	Producer Price Index