Weekly Market Preview
Friday, 16th of May 2025
Investors are awaiting a series of key economic data releases this week. One of the most closely watched events is the Reserve Bank of Australia’s interest rate decision, where a 25-basis point cut (from 4.10% to 3.85%) is widely expected. This potential move comes as inflation has remained steady at 2.4% since the fourth quarter of last year, while core inflation dropped significantly to 2.9% in the first quarter after falling below the 3% threshold. In addition to softening inflation, weak economic growth is another factor supporting a potential rate cut. Australia’s GDP grew by just 0.6% in the final quarter of 2024, increasing pressure on the RBA to ease policy to stimulate the economy.
Markets are also anticipating the Canadian Consumer Price Index report for April, which is expected to show a rise in headline inflation from 2.3% in March to 2.5%, and core inflation from 2.2% to 2.3%. The unemployment rate also climbed from 6.7% to 6.9%, reinforcing expectations that the Bank of Canada will lower interest rates by 25 basis points at its June meeting. However, if inflation comes in higher than expected (overshooting from the 2% target) it could limit the central bank’s ability to continue easing policy or make the decision more complex.
In the United Kingdom, April’s Consumer Price Index report is expected to show an increase in inflation from 2.6% in March to 3.3%. The Bank of England previously cut rates by 25 basis points at its last meeting, from 4.5% to 4.25%. However, a stronger-than-expected inflation reading could prompt the Monetary Policy Committee to slow the pace of future cuts. The Bank of England is currently projected to reduce rates two or three more times this year, provided inflation remains within a manageable range. Conversely, if inflation data surprises the downside, that could leave more space for the policymakers to accelerate the pace of rate reductions or at least maintain the current trajectory.
Monday, 19th of May
Tuesday, 20th of May
Wednesday, 21st of May
Thursday, 22nd of May
Friday, 23rd of May