Inflation, Bank of England and China data. It's been a hot week in the markets

The second week of May has financial markets will be marked primarily by inflation in the US, meeting Bank of England and data from China. In Poland, the meeting of the Monetary Policy Council will be an event.

What awaits us this week?

Investors have barely recovered from an interesting first week of May when the markets dealt the cards Fed i ECB, and emotions were caused by data from the American labor market, inflation data from Europe and traditionally PMI indices, and they are already entering another hot week. All thanks to data from the US and China, as well as the meeting of the Bank of England (BoE).

The main event of the second week of May in the financial markets will be the US inflation data released on Wednesday and Thursday. Data that may deepen expectations that the Fed has already finished the cycle of interest rate hikes, or put a big question mark on this thesis. It is expected in April CPI inflation will remain at 5%. YoY, but core inflation will fall to 5,5%. from 5,6 percent Y/Y in March. A decline in both measures is expected to take place in the case of producer inflation. PPI inflation is expected to fall to 2,5% in April. from 2,7 percent y/y in March, and core PPI inflation to 3,3 percent. from 3,4 percent

US macroeconomic calendar (preliminary data). Table: macronext.pl

Is the Chinese economy recovering?

China data will be released this week. foreign trade balance (forecast: USD 71,6 billion), new credits (CNY 1400 billion) and CPI inflation (forecast: 0,3% y/y) and PPI (forecast: -3,2% y/y). These reports will be analyzed in terms of the expected recovery in the Chinese economy, which has recently been overshadowed by disappointing PMI indices.

Interest rates in England and Poland

The British will start this week with a day off, but its ending will be electrifying. First, on Thursday, May 11, it will make a decision on interest rates Bank of England (forecast: hike by 25bp to 4,50%), and on Friday March industrial output data (forecast: -2,9% y/y) and preliminary GDP data for the first quarter of this year will be published. (forecast: 0,2% y/y).

Our rates will also be decided this week The Monetary Policy Council (RPP). This is not the time to change them yet, or even to announce a possible cut in the future, so the meeting itself, as well as the press conference of President Adam Glapiński the day after the meeting, will not have a significant impact on the zloty, Polish bonds or shares on the stock exchange in Warsaw.

The end of the results publication season

This week, however, it will disappear from investors' radars results season on Wall Street. It is still ongoing, but the most important and largest companies have already published quarterly reports. On the other hand, the results of European companies will flow, which will have a partial impact on stock exchanges in Europe.

Two important political events must not be forgotten either. In the US, the decision to increase has still not been made debt limit. President Biden is scheduled to meet with Republican and Democrat leaders on the matter on Tuesday. In Turkey, on the other hand, presidential and parliamentary elections will be held next Sunday, which may have a big impact on the local lira.