Economic Indicators Shape Rate Cut Outlook as Inflation Data and Fed Speakers Take Center Stage

In the coming week, several important economic indicators will shape the outlook for monetary policy, particularly regarding interest rate cuts in the US. The April inflation report in the US on May 15 will be closely watched, with forecasts predicting a modest decrease in the monthly Consumer Price Index (CPI), while overall retail sales are expected to rise. Meanwhile, China’s April inflation data, released ahead of schedule, revealed a welcome pickup in prices, which could strengthen hopes for earlier US rate cuts. Other significant economic updates this week include data on US producer prices, retail sales, and jobless claims, as well as final reports on European inflation. Fed speakers are scheduled to address the markets throughout the week, including Chair Jerome Powell, whose appearance with the head of the Dutch central bank is highly anticipated. Global stock indices have reached record highs recently, despite reduced bets on rate cuts this year. However, the US dollar remains robust against other major currencies, with the threat of Japanese intervention preventing it from approaching the 160 yen threshold. Gold prices have risen due to demand from momentum funds and rumors of continued Chinese purchases, reaching $2,362 per ounce. Oil prices have declined as US gasoline and distillate inventories rose before the beginning of the summer driving season. Brent crude oil stands at $82.52 a barrel, while West Texas Intermediate (WTI) crude oil is trading at $78.05 per barrel.