The Week Ahead: Highlights

Asia-Pacific Preview

Watching for Another RBA Rate Hike

By Brian Jackson, Econoday Economist

The Reserve Bank of Australia policy meeting will be the main focus. Officials have raised policy rates at each of their two previous meetings and indicated that further policy tightening will be considered if the inflation outlook does not improve. Since then, the spike in fuel prices caused by the Iran conflict has pushed monthly inflation sharply higher, suggesting another rate hike is likely next week. Australia will also report household spending and trade data in the week ahead.

PMI surveys for April will also be a major focus in the Asia-Pacific region. PMI surveys for China published this week showed mixed results, but next week's reports should provide further information about the impact of the Iran conflict on activity, sentiment and cost pressures in the region.

Taiwan will report trade and inflation data next week, while Hong Kong will publish its GDP report and New Zealand will publish quarterly labour market data.

Europe Preview

After an Eventful Week, Eyes Turn to German Data

By Marco Babic, Econoday Economist

As the conflict in the Middle East enters its third month with no signs of abating, last week's inflation data showed to what extent it's impacting prices. Consumer inflation picked up to levels that are bound to make the European Central Bank uncomfortable. While the ECB kept rates steady, as did the US Federal Reserve, policy makers are facing a dilemma of combating inflation and keeping tepid economic growth from turning negative.

Certainly core inflation rates which strip out the effects of higher energy costs reflect more moderate inflation. In fact, falling energy prices prior to the conflict have kept inflation muted. Still, higher energy prices force consumers into choices on discretionary spending which will crimp GDP. It's small comfort to consumers to hear that inflation excluding energy and fuel is moderate. After all, inflation excluding everything is flat.

Germany will provide some clues as to how industry is coping with the conflict. On Thursday, March factory orders are scheduled for release, followed by industrial production on Friday. There has been some evidence that production has picked up in other economies as businesses attempt to boost inventory and, by extension, production to get ahead of expected price increases for raw materials, particularly intermediate goods. At the same time, they are ramping up production to keep up with orders. While increased industrial activity is welcome, it would be increasing for reasons that are not optimal.

In addition, trade data for France and Germany are released Thursday and Friday, respectively for March. This could give indications of how much has been affected by the conflict. The effect of tariffs which was such a big talking point for months, now seems to have turned to a whisper.

Ultimately, the European Central Bank will likely be forced to raise interest rates just at a time when economic growth is sluggish.

US Preview

US Employment Report in Focus

By Theresa Sheehan, Econoday Economist

The highlight in the May 4 week will be the April employment report at 8:30 ET on Friday. The April numbers on payrolls and the unemployment rate could set the tone for the labor market in the second quarter of 2026. With the conflict in Iran stretching on with no progress in concluding the violence, businesses face ongoing geopolitical uncertainties. Businesses will be reluctant to expand payrolls or hire into open positions. Moreover, the upward price pressures from energy costs may lead to some layoff activity that could accelerate if a resolution in hostilities is not reached soon.

The Challenger report for job cut and hiring intentions in April at 7:30 ET on Thursday should reflect which industries are feeling the pinch of increased costs and worries about a return of inflationary pressures and concerned about no relief for higher energy prices in the near term. There may be outright layoffs and/or elimination of planned hiring. The only sector that probably isn't affected as yet is healthcare which has been the major source of new jobs in recent months. Hiring plans are likely top be limited to a few sectors that normally add to payrolls in the spring largely retail and leisure and hospitality but this could be less than usual.

While early estimates for nonfarm payrolls in April are for tepid job gains, the April report has a strong tendency to come in below the consensus forecast and then subsequently be revised lower in the following month's report. April can be a tough month to forecast due to the timing of the spring holidays, and if businesses decided to speed up hiring in March to get ahead of the demand for seasonal workers. The survey reference week for April is 5 weeks in 2026, so it should capture a full picture of payroll gains in the early part of the month.

Stagnant payroll growth or even some modest declines will affect the FOMC's outlook for monetary policy. The committee will have to determine of a soft labor market is more of a risk to growth than rising inflation even if the pass through from energy costs is of limited duration.

There is an interesting notice on the BLS website the indicates that there may be an effort to backfill some of the missing data in the consumer price index, or at least prepare for some of the consequences like creating seasonal adjustment factors (https://www.bls.gov/bls/bls-engages-expert-panels-regarding-missing-consumer-expenditure-data.htm). The BLS is holding public meetings with the National Association for Business Economics (NAB) and Committee on National Statistics (CNSTAT) on May 7 and 8, respectively.

The Week Ahead: Econoday Consensus Forecasts

Monday

US Motor Vehicle Sales for April (Any Time)

Consensus Forecast, Total Vehicle Sales - Annual Rate: 16.1 M

Consensus Range, Total Vehicle Sales - Annual Rate: 16.0 M to 16.2 M

The consensus looks for sales lower at a 16.1 million unit rate in April from 16.3 million in March.

India PMI Manufacturing Final for April (Mon 1030 IST; Mon 0500 GMT; Mon 0100 EDT)

Consensus Forecast, Index: 55.9

Consensus Range, Index: 55.9 to 55.9

Forecasters see no revision from the flash at 55.9 for the April final, up from 53.9 in the March final.

France PMI Manufacturing Final for April (Mon 0850 CEST; Mon 0650 GMT; Mon 0250 EDT)

Consensus Forecast, Index: 52.8

Consensus Range, Index: 52.8 to 52.8

The consensus looks for no revision from the flash at 52.8 for the April final, up from 50.0 in March

Germany PMI Manufacturing Final for April (Mon 0955 CEST; Mon 0755 GMT; Mon 0355 EDT)

Consensus Forecast, Index: 51.2

Consensus Range, Index: 51.2 to 51.2

The consensus looks for no revision from the flash at 51.2 for the April final, down from 52.2 in March.

Eurozone PMI Manufacturing Final for April (Mon 1000 CEST; Mon 0800 GMT; Mon 0400 EDT)

Consensus Forecast, Index: 52.2

Consensus Range, Index: 51.2 to 52.2

The consensus looks for no revision from the flash at 52.2 for the April final, up from 51.6 in March.

US Factory Orders for March (Mon 1000 EDT; Mon 1400 GMT)

Consensus Forecast, M/M: 0.5%

Consensus Range, M/M: -0.1% to 1.0%

With durable goods orders already reported up 0.8 percent for March, the consensus sees factory orders up a similar 0.5 percent.

Tuesday

Australia Household Spending for March (Tue 1130 AEST; Tue 0130 GMT; Mon 2130 EDT)

Consensus Forecast, M/M: 2.0%

Consensus Range, M/M: -0.5% to 2.4%

The consensus sees spending up 2.0 percent in March in nominal terms after rising 0.3 percent in February. This gets a big boost from the effect of higher fuel prices starting in March.

Australia RBA Announcement (Tue 1430 AEST; Tue 0430 GMT; Tue 1230 EDT)

Consensus Forecast, Change: 25 bp

Consensus Range, Change: 0 bp to 25 bp

Consensus Forecast, Level: 4.35%

Consensus Range, Level: 4.10% to 4.35%

After two straight 25 basis point increases, the RBA is expected to raise rates by another 25 bp at this meeting as inflation remains too hot.

Canada Merchandise Trade for March (Tue 0830 EDT; Tue 1230 GMT)

Consensus Forecast, Balance: -C$3.4 B

Consensus Range, Balance: -C$3.8 B to -C$2.0 B

The consensus sees a deficit of C$3.4billion in March after a C$5.743 billion deficit in February.

US International Trade in Goods and Services for March (Tue 0830 EDT; Tue 1230 GMT)

Consensus Forecast, Balance: -$60.4 B

Consensus Range, Balance: -$65.2 B to -$57.6 B

Forecasters see the deficit widening to $60.4 billion in March from $57.3 billion in February.

US PMI Composite Final for March (Tue 0945 EDT; Tue 1345 GMT)

Consensus Forecast, Composite Index: 52.0

Consensus Range, Composite Index: 52.0 to 52.0

Consensus Forecast, Services Index: 52.1

The consensus looks for no revision from the flash at 52.0 for the April composite final, up from 50.3 in March. For services, an upward revision is expected to 52.1 from 51.3 in the flash versus 49.8 in March.

US New Home Sales for February (Tue 1000 EDT; Tue 1400 GMT)

Consensus Forecast, Annual Rate: 610 K

Consensus Range, Annual Rate: 599 K to 675K

US New Home Sales for March (Tue 1000 EDT; Tue 1400 GMT)

Consensus Forecast, Annual Rate: 668K

Consensus Range, Annual Rate: 618K to 700K

Home sales seen recovering to a 668,000 rate in March, and to 610,000 in February from a surprisingly low 587,000 in January.

US ISM Services Index for April (Tue 1000 EDT; Tue 1400 GMT)

Consensus Forecast, Index: 53.9

Consensus Range, Index: 53.2 to 55.0

Similar to the ISM manufacturing report that was unchanged from March to April at 52.7, the services index is seen flat at 53.9 in April versus 54.0 in March.

Wednesday

New Zealand Labour Market Conditions for First Quarter (Wed 1045 NZST; Tue 2245 GMT; Tue 1845 EDT)

Consensus Forecast, Unemployment Rate: 5.4%

Consensus Range, Unemployment Rate: 5.3% to 5.4%

The jpbless rate is expected flat at 5.4% in Q1 versus 5.4 percent in Q4.

South Korea CPI for April (Thu 0800 KST; Wed 2300 GMT; Wed 1900 EDT)

Consensus Forecast, Y/Y: 2.5%

Consensus Range, Y/Y: 2.4% to 2.7%

CPI expected up 2.5 percent on year in April versus 2.2 percent in March.

China PMI Composite for April (Wed 0945 CST; Wed 0145 GMT; Tue 2145 EDT)

Consensus Forecast, Services Index: 52.0

Consensus Range, Services Index: 52.0 to 52.5

Services expected nearly unchanged at 52.0 in April versus 52.1 in March.

France Industrial Production for March (Wed 0845 CEST; Wed 0645 GMT; Wed 0245 EDT)

Consensus Forecast, M/M: 0.2%

Consensus Range, M/M: 0.2% to 0.5%

Output seen up 0.2 percent in March on the month versus minus 0.7 percent in February.

France PMI Composite Final for April (Wed 0850 CEST; Wed 0650 GMT; Wed 0250 EDT)

Consensus Forecast, Services Index: 46.5

Consensus Range, Services Index: 46.5 to 46.8

The consensus looks for no revision from 46.5 in the flash for services.

Eurozone PMI Composite Final for April (Wed 0900 CEST; Wed 0700 GMT; Wed 0300 EDT)

Consensus Forecast, Composite Index: 48.6

Consensus Range, Composite Index: 48.6 to 48.6

Consensus Forecast, Services Index: 47.4

Consensus Range, Services Index: 47.4 to 47.4

The consensus looks for no revision from the flash at 48.6 for the April composite final versus 50.7 in March. For services, no revision expected from 47.4 in the flash versus 50.2 in March.

Germany PMI Composite Final for April (Wed 0955 CEST; Wed 0755 GMT; Wed 0355 EDT)

Consensus Forecast, Composite Index: 48.3

Consensus Range, Composite Index: 48.3 to 48.3

Consensus Forecast, Services Index: 46.9

Consensus Range, Services Index: 46.9 to 46.9

The consensus looks for no revision from the flash at 48.3 for the April composite final versus 51.9 in March. For services, no revision expected from 46.9 in the flash versus 50.9 in March.

UK PMI Composite Final for April (Wed 0930 BST; Wed 1030 GMT; Wed 0430 EDT)

Consensus Forecast, Composite Index: 52.0

Consensus Range, Composite Index: 52.0 to 52.0

Consensus Forecast, Services Index: 52.0

Consensus Range, Services Index: 52.0 to 52.0

The consensus looks for no revision from the flash at 52.0 for the April composite final versus 50.3 in March. For services, no revision expected from 52.0 in the flash versus 50.5 in March.

US ADP Employment Report for April (Wed 0815 EDT; Wed 1215 GMT)

Consensus Forecast, Private Payrolls - M/M: 85K

Consensus Range, Private Payrolls - M/M: 40K to 140K

Payrolls seen up a decent 85K after rising 62K in March.

Thursday

Australia International Trade in Goods for March (Thu 1130 AEST; Thu 0130 GMT; Wed 2130 EDT)

Consensus Forecast, Balance: A$4.25 B

Consensus Range, Balance: A$2.0 B to A$7.5 B

The surplus expected down to A$4.25 billion in March from A$5.586 billion in February.

Germany Manufacturing Orders for March (Thu 0800 CEST; Thu 0600 GMT; Thu 0200 EDT)

Consensus Forecast, M/M: 1.0%

Consensus Range, M/M: -1.5% to 1.7%

Manufacturing orders are expected up another 1.0 percent on the month in March after rising 0.9 percent in February.

Eurozone Retail Sales for March (Thu 1100 CEST; Thu 0900 GMT; Thu 0500 EDT)

Consensus Forecast, M/M: -0.1%

Consensus Range, M/M: -1.0% to 0.4%

Consensus Forecast, Y/Y: 1.3%

Consensus Range, Y/Y: 0.2% to 1.4%

Sales expected down 0.1 percent in March on the month and up 1.3 percent on year.

US Jobless Claims for Week 05/02 (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Initial Claims - Level: 205K

Consensus Range, Initial Claims - Level: 190K to 215K

Claims expected to rebound to 205K in the latest week after a surprise 26K drop to 189k a week ago.

US Productivity and Costs for First Quarter (Thu 0830 EDT; Thu 1230 GMT)

Consensus Forecast, Nonfarm Productivity - Annual Rate: 1.7%

Consensus Range, Nonfarm Productivity - Annual Rate: 1.4% to 2.0%

Consensus Forecast, Unit Labor Costs - Annual Rate: 2.0%

Consensus Range, Unit Labor Costs - Annual Rate: 1.6% to 3.6%

The consensus looks for productivity up 1.7 percent in Q1 and unit labor costs up 2.0 percent. In Q4 the numbers were 1.8 percent and 4.4 percent, respectively.

US Construction Spending for February (Thu 1000 EDT; Thu 1400 GMT)

Consensus Forecast, M/M: 0.2%

Consensus Range, M/M: 0.1% to 0.3%

US Construction Spending for March (Thu 1000 EDT; Thu 1400 GMT)

Consensus Forecast, M/M: 0.4%

Consensus Range, M/M: -0.1% to 0.6%

Construction expected to rebound by 0.2 percent in February and another 0.4 percent on the month in March after dipping by 0.3 percent in January.

US Consumer Credit for March (Thu 1500 EDT; Thu 1900 GMT)

Consensus Forecast, M/M: $12.0 B

Consensus Range, M/M: $10 B to $12.9 B

Expected up by a moderate $12 billion in March after increasing by $9.5 billion in February.

Friday

Germany Industrial Production for March (Fri 0800 CEST; Fri 0600 GMT; Fri 0200 EDT)

Consensus Forecast, M/M: -0.2%

Consensus Range, M/M: -1.5% to 3.0%

Consensus Forecast, Y/Y: -2.5%

Consensus Range, Y/Y: -3.7% to -1.7%

Sales seen down 0.2 percent on month in March and down a dismal 2.5 percent on year.

Germany Merchandise Trade for March (Fri 0800 CET; Fri 0600 GMT; Fri 0200 EDT)

Consensus Forecast, Balance: E16.5 B

Consensus Range, Balance: E14.0 B to E20.1 B

The consensus sees the surplus down at E16.5 billion versus E19.8 billion in February.

Canada Labour Force Survey for April (Fri 0830 EDT; Fri 1230 GMT)

Consensus Forecast, Employment - M/M: 16K

Consensus Range, Employment - M/M: 6K to 25K

Consensus Forecast, Unemployment Rate: 6.7%

Consensus Range, Unemployment Rate: 6.6% to 6.7%

Employment bouncing back a bit in March and April from losses early in January and February but not enough to move the jobless rate from 6.7 percent in April.

US Employment Situation for April (Fri 0830 EDT; Fri 1230 GMT)

Consensus Forecast, Nonfarm Payrolls - M/M: 63K

Consensus Range, Nonfarm Payrolls - M/M: 0 to 150K

Consensus Forecast, Unemployment Rate: 4.3%

Consensus Range, Unemployment Rate: 4.2% to 4.4%

Consensus Forecast, Private Payrolls - M/M: 67K

Consensus Range, Private Payrolls - M/M: 40K to 95K

Consensus Forecast, Average Hourly Earnings - M/M: 0.3%

Consensus Range, Average Hourly Earnings - M/M: 0.2% to 0.3%

Consensus Forecast, Average Hourly Earnings - Y/Y: 3.8%

Consensus Range, Average Hourly Earnings - Y/Y: 3.6% to 3.8%

Consensus Forecast, Average Workweek: 34.2

Consensus Range, Average Workweek: 34.2 to 34.3

A moderate increase of 63K is the call for nonfarm payrolls with the jobless rate flat at 4.3 percent.

US Consumer Sentiment for May (Fri 1000 EDT; Fri 1400 GMT)

Consensus Forecast, Index: 49.3

Consensus Range, Index: 48.0 to 53.0

Sentiment expected to slip to 48.6 in the first report for May from an already gloomy 49.8 in the April final as consumers are unhappy about rising prices for gas and worried about the economic outlook.