The week ahead: 13 - 17 May 2024
These are the Key Macro Events for the upcoming week.
US – April CPI will be closely watched by markets. We expect a somewhat slower pace of price growth on the core measure, albeit still on the firm side, with continued rises in car insurance premiums likely to offset a cooling in the shelter component and falling used car prices. Retail sales are expected to rise only modestly in nominal terms, meaning a stagnation in real terms, as the tailwind from rising real incomes and excess savings fades. Finally, the recovery in industrial production looks to be running out of steam, as signalled by the recent pullback in the manufacturing PMI.
The Netherlands – Q1 GDP published on Wednesday is expected to marginally increase. Qoq consumption growth is expected to decline (but stay positive) from the historically high qoq increase in Q4 of 2023 (1.9%). Consumption growth is supported by increasing real incomes but the spending effect of the energy lump sum payment disappears which is expected to push the figure down. Private investments are expected to stay weak on the back of still elevated interest rates and the weaker economic environment. Exports are expected to stagnate, but we do see some upward risks given the recent bottoming-out of global trade and industry, as explained in our recent .
The unemployment rate is expected to have marginally increased to 3.7% in April (up from 3.6% in March) as underlying labour market tightness continues to ease slightly. Still, from a historical perspective the labour market is likely to stay tight.
China – We still expect the PBoC to come with further (mini) policy rate cuts in the coming months, but – in line with consensus – expect no change in the 1-year medium-term lending rate next week yet (Wednesday 15 May). Partly reflecting remaining currency issues, the PBoC is generally expected to wait until June, closer to the start of the rate cut cycles by Fed/ECB. Meanwhile, the April activity data published on Friday 17 May are expected to show some improvement in annual growth terms, although it is likely that the rebound will continue to be led by the supply side (also see our ).