Week Ahead: Fed and BoE Interest Rate Announcements in the Spotlight

Monday, May 5, 2025, will feature the release of Switzerland's year-on-year inflation rate at 06:30 GMT, expected to remain low or slightly decline. The U.S. ISM Services PMI for April will follow at 14:00 GMT, with a forecasted decrease to 49.4, signalling a mild service sector contraction. Tuesday, May 6, 2025, will bring the Eurozone PPI YoY at 09:00 GMT, with an expected rise to 4%, reflecting higher energy costs and supply chain constraints.

Wednesday, May 7, 2025, will see the Eurozone retail sales YoY at 09:00 GMT, expected to ease to 0.2%, followed by the U.S. Federal Reserve's interest rate decision at 18:00 GMT, with rates anticipated to remain at 4.5%. Thursday, May 8, 2025, will feature the Bank of England's interest rate decision at 11:00 GMT, with a likely cut to 4.25%, and Japan's household spending YoY at 23:30 GMT, expected to rebound to 1.2%. Finally, Friday, May 9, 2025, will bring Canada's unemployment rate and employment change data at 12:30 GMT, with a slight rise in unemployment to 6.8% and an expected gain of 12k jobs.

Monday, 5 May 2025: [06:30 GMT] Swiss Inflation Rate YoY, [14:00 GMT] U.S. ISM Services PMI

Switzerland’s year-on-year inflation rate was 0.3% in March 2025, and for April, it is expected to remain very low or decline slightly. This expectation is mainly due to the strong Swiss franc, which makes imports cheaper and suppresses domestic prices, along with weak global demand and slowing economic growth. Additionally, falling mortgage reference rates are likely easing housing costs, further dampening inflationary pressure. This data is set to be released on 5 May at 0630 GMT.

(Swiss Inflation Rate YoY Chart, Source: Trading Central)

The U.S. ISM Services PMI registered 50.8 in March, while the April reading is expected to decline to 49.4. This anticipated drop suggests a mild service sector contraction, likely driven by softer consumer demand, rising borrowing costs, and lingering economic uncertainty. Higher interest rates continue to weigh on business activity and consumer spending, while inflationary pressures and tighter credit conditions also contribute to slowing service sector growth. This data is set to be released on 5 May at 1400 GMT.

(U.S. ISM Services PMI Chart, Source: Trading Central)

Top US company earnings: Berkshire Hathaway (BRK), Palantir (PLTR)

Tuesday, 6 May 2025: [09:00 GMT] Eurozone PPI YoY

The Eurozone’s Producer Price Index (PPI) rose 3% year-on-year in February, and the March reading is expected to accelerate to 4%. This anticipated increase is mainly driven by higher energy prices and rising costs in industrial inputs, reflecting ongoing supply chain constraints and geopolitical tensions. Additionally, resilient demand in certain sectors may allow producers to pass more costs onto buyers, contributing to the upward pressure. This data is set to be released on 6 May at 0900 GMT.

(Eurozone PPI YoY Chart, Source: Trading Central)

Top US company earnings: AMD (AMD), Arista Networks (ANET)

Wednesday, 7 May 2025: [09:00 GMT] Eurozone Retail Sales YoY, [18:00 GMT] Fed Interest Rate Decision

Eurozone retail sales grew by 0.3% year-on-year in February, with the March reading expected to ease slightly to 0.2%. This modest slowdown likely reflects cautious consumer spending amid persistent inflationary pressures and higher interest rates, which are weighing on household purchasing power. Additionally, signs of economic uncertainty across the bloc may prompt consumers to prioritise savings over discretionary spending, keeping retail sales growth subdued. This data is set to be released on 7 May at 0900 GMT.

(Eurozone Retail Sales YoY Chart, Source: Trading Central)

The Federal Reserve's most recent interest rate decision left rates at 4.5%, and the upcoming decision is also expected to maintain the rate at 4.5%. This steady outlook reflects the Fed’s cautious approach as it balances the need to control inflation without further straining economic growth. With recent data showing moderating inflation but still resilient labour market conditions, policymakers are likely to hold rates steady to assess

the full impact of previous tightening measures before considering any future adjustments. This data is set to be released on 7 May at 1800 GMT.

(Fed Interest Rate Decision Chart, Source: Trading Central)

Top US company earnings: Novo Nordisk (NVO), Uber Tech (UBER)

Thursday, 8 May 2025: [11:00 GMT] BoE Interest Rate Decision, [23:30 GMT] Japan Household Spending YoY

The Bank of England’s most recent interest rate decision set the benchmark rate at 4.5%, but the upcoming decision is expected to lower it to 4.25%. This anticipated cut reflects growing signs of economic slowdown and easing inflationary pressures within the UK. With softer consumer spending, cooling wage growth, and headline inflation trending down, policymakers likely aim to support economic activity while ensuring inflation continues moving towards the 2% target. This data is set to be released on 8 May at 1100 GMT.

(BoE Interest Rate Decision Chart, Source: Trading Central)

Japan’s household spending fell by 0.5% year-on-year in February, but the March reading is expected to rebound to 1.2%. This anticipated recovery is likely driven by improving consumer sentiment, supported by rising wages and stabilising inflation. Additionally, seasonal factors such as the start of the new fiscal year in Japan typically boost spending on education, housing, and other services, contributing to stronger household expenditure. This data is set to be released on 8 May at 2330 GMT.

(Japan Household Spending YoY Chart, Source: Trading Central)

Top US company earnings: Toyota Motor (TM), Shopify (SHOP)

Friday, 9 May 2025: [12:30 GMT] Canada Unemployment Rate, [12:30 GMT] Canada Employment Change

Canada’s unemployment rate stood at 6.7% in March, with the April reading expected to edge up slightly to 6.8%. This anticipated increase reflects signs of a cooling labour market, as slower economic growth and higher interest rates continue to weigh on business hiring. Companies across various sectors are becoming more cautious amid weaker demand and tighter financial conditions, leading to a modest rise in unemployment. This data is set to be released on 9 May at 1230 GMT.

(Canada Unemployment Rate Chart, Source: Trading Central)

Canada saw a 32.6k employment decline in March, but the April reading is expected to show a gain of 12k. This expected recovery reflects a potential rebound in hiring as businesses adjust to the previous economic slowdown and higher interest rates. In some sectors, such as services and retail, that regain momentum and seasonal demand picks up, employers are likely to add jobs, offsetting the losses from the previous month. This data is set to be released on 9 May at 1230 GMT.

(Canada Employment Change Chart, Source: Trading Central)

Top US company earnings: Enbridge (ENB), Nippon (NTTYY)

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