Iran has sent a revised peace proposal to the United States for review, with investors awaiting signs of whether it could provide a basis for renewed negotiations.
In the meantime, US President Donald Trump said on Sunday that Washington would assist in freeing ships currently stranded in the Strait of Hormuz. In a post on Truth Social, he said countries not involved in the conflict had requested US assistance to help vessels transit the waterway. “For the good of Iran, the Middle East, and the United States, we have told these countries that we will guide their ships safely out of these restricted waterways, so that they can freely and ably get on with their business,” he said.
On Monday, the UK will observe a bank holiday. Later in the week, voters across the country will head to the polls for local elections, with the Labour-led government expected to suffer significant losses.
Investors will also receive the minutes of the Bank of Japan monetary policy meeting on Thursday.
All Times Are GMT
Monday 4 May
Speakers: RBNZ’s Gai | ECB’s Lagarde, Cipollone, de Guindos | Fed's Williams
Citi analysts expect the Reserve Bank of Australia’s Monetary Policy Board to deliver a third consecutive increase in the cash rate target, lifting it back to the post-pandemic high of 4.35%. The board last met when the Middle East conflict was only a few weeks old, but will reconvene in its tenth week, facing a more entrenched energy shock.
Citi said that while the sharp acceleration in Q1 CPI largely reflected the initial impact of higher oil prices, policymakers may need to act pre-emptively to contain broader second-round effects. “The RBA may need to get ahead of the bigger shock that will come from the downstream impact on more than 50% of the CPI basket via the transport supply chain and oil’s use in the production of a variety of industrial and consumer goods,” the bank said.
14:00 – US Apr ISM Services Index Consensus: 53.7 (prev 54.0)
Deutsche Bank said Tuesday’s ISM services will provide an update on business and consumer sentiment. “Within the ISM, we will be paying most attention to the employment and supplier delivery subcomponents, the latter of which is a good leading indicator for future inflation.”
Speakers: RBA’s Bullock | ECB’s Lagarde, de Guindos, Lane | Fed’s Barr, Bowman
Economists at ANZ Bank said Q1 labour market data is the next key release, though it will reflect past economic conditions and may therefore have limited implications for the monetary policy outlook. The RBNZ highlighted inflation expectations as a key watch point in the April MPR (see this guide). Pricing intentions in our Business Outlook were broadly steady in April, and own-wage expectations eased, while consumer inflation expectations jumped to 6.6%. Business and consumer confidence fell sharply. Elsewhere, building consents dipped, Governor Breman’s comments were balanced, and the Minister of Finance agreed to an updated RBNZ Charter allowing MPC members greater freedom to speak between meetings, and attributed votes.
Analysts at Societe Generale noted that after the strong rise in factory orders at the end of last year on the back of the German fiscal stimulus, orders pulled back strongly in January, something that should result in a contraction in Q1. The bank’s experts said that despite the outbreak of the war, surveys signalled continued optimism on new orders in March, which should result in a small monthly improvement. “It is also possible that some companies will have front-loaded orders in March and maybe April to get ahead of future price increases. Looking ahead, downside risks in manufacturing have increased, although Germany will continue to benefit from rising infrastructure and defence spending.”
08:30 – Riksbank Apr Interest Rate Decision Consensus: On Hold (prev 1.75%)
JPMorgan said it expected the Riksbank to remain at its May meeting. “The Bank has been much less assertive on the need to tighten since the energy shock, reflecting the low inflation backdrop in Sweden. However, the Riksbank was the first in March to publish a scenario showing the impact of a sustained closure of the Strait. This scenario is arguably now playing out, albeit with energy prices that are lower than expected.
On guidance, JP Morgan noted that in March, the Riksbank stated that the policy rate “is expected to remain at this level for some time to come”. Analysts said this was consistent with the rate projection it published at the time, although it now feels like a strong statement to repeat again, given the increasing risk that at least some tightening will be required.
09:00 - Norges Bank Interest Rate Decision Consensus: 25 BPS Hike (prev 4.00%)
The Norwegian central bank is widely expected to hike the policy rate by 25bp to 4.25% this week. “At the meeting in March, the rate committee stated that ‘..it will likely be appropriate to raise the policy rate at one of the forthcoming monetary policy meetings’ which must be interpreted as the committee foreseeing a rate hike either at the meeting in May or June,” posited Danske Bank analysts. “But we still believe that the hike will be delivered next week because the monetary policy signals are based on a need to anchor inflation expectations, i.e. it is more about the risk assessment than the point estimate of inflation.” The Scandinavian bank’s research team maintained that the rate committee at Norges Bank fears that confidence in monetary policy is weakening, and that households and firms no longer assume that inflation will decline towards the target of 2%. This is reinforced by the fact that two of the five members of the committee voted to hike the policy rate already at the meeting in March.
Speakers: ECB’s de Guindos, Elderson, Lane, Schnabel | BoE’s Lomabrdelli, Mann | Fed’s Hammack, Williams
Friday 8 May
12:30 – US Apr Nonfarm Payrolls Consensus: Change 60k (178k)
BMO forecasts nonfarm payroll growth to slow to 70,000 in April after March’s 178,000 increase, which was the largest one-month gain in net jobs in more than a year. “Solid increases in health care, leisure and hospitality, trade and transportation, and construction helped lift payrolls in March,” noted experts at the Canadian bank. “That’s a one-month performance that will be hard to beat, especially as companies prepare for rising input costs and increasing margin pressure from the energy price shock. The ADP weekly employment survey implies some upside risk to our forecast as private sector job growth appears to have accelerated to around 157,000 a month in the second week of April.”
12:30 – Canada Apr Labour Market Report Consensus: Net Chng 8.2k (prev 14.1k)
TD Securities said, “We look for employment to rise by just 5,000 in April, leaving the unemployment rate stable at 6.7%. Hiring intentions looked a little brighter in the Q1 CSCE, but more timely measures from CFIB and S&P PMIs remain sluggish. Our forecast for 5,000 sits in line with the 6m trend, while wage growth should slow 0.3 percentage point to a still-elevated 4.8% y/y.”
Iran has sent a revised peace proposal to the United States for review, with investors awaiting signs of whether it could provide a basis for renewed negotiations.
In the meantime, US President Donald Trump said on Sunday that Washington would assist in freeing ships currently stranded in the Strait of Hormuz. In a post on Truth Social, he said countries not involved in the conflict had requested US assistance to help vessels transit the waterway. “For the good of Iran, the Middle East, and the United States, we have told these countries that we will guide their ships safely out of these restricted waterways, so that they can freely and ably get on with their business,” he said.
On Monday, the UK will observe a bank holiday. Later in the week, voters across the country will head to the polls for local elections, with the Labour-led government expected to suffer significant losses.
Investors will also receive the minutes of the Bank of Japan monetary policy meeting on Thursday.
All Times Are GMT
Speakers: RBNZ’s Gai | ECB’s Lagarde, Cipollone, de Guindos | Fed's Williams
04:30 – RBA May Interest Rate Decision
Consensus: 25bps Hike (prev 4.35%)
Citi analysts expect the Reserve Bank of Australia’s Monetary Policy Board to deliver a third consecutive increase in the cash rate target, lifting it back to the post-pandemic high of 4.35%. The board last met when the Middle East conflict was only a few weeks old, but will reconvene in its tenth week, facing a more entrenched energy shock.
Citi said that while the sharp acceleration in Q1 CPI largely reflected the initial impact of higher oil prices, policymakers may need to act pre-emptively to contain broader second-round effects. “The RBA may need to get ahead of the bigger shock that will come from the downstream impact on more than 50% of the CPI basket via the transport supply chain and oil’s use in the production of a variety of industrial and consumer goods,” the bank said.
14:00 – US Apr ISM Services Index
Consensus: 53.7 (prev 54.0)
Deutsche Bank said Tuesday’s ISM services will provide an update on business and consumer sentiment. “Within the ISM, we will be paying most attention to the employment and supplier delivery subcomponents, the latter of which is a good leading indicator for future inflation.”
Speakers: RBA’s Bullock | ECB’s Lagarde, de Guindos, Lane | Fed’s Barr, Bowman
22:45 – New Zealand Q1 Employment Change
Consensus: Q/Q 0.3% (prev 0.5%)
Economists at ANZ Bank said Q1 labour market data is the next key release, though it will reflect past economic conditions and may therefore have limited implications for the monetary policy outlook. The RBNZ highlighted inflation expectations as a key watch point in the April MPR (see this guide). Pricing intentions in our Business Outlook were broadly steady in April, and own-wage expectations eased, while consumer inflation expectations jumped to 6.6%. Business and consumer confidence fell sharply. Elsewhere, building consents dipped, Governor Breman’s comments were balanced, and the Minister of Finance agreed to an updated RBNZ Charter allowing MPC members greater freedom to speak between meetings, and attributed votes.
Speakers: ECB's Schnabel, Lane, Cipollone | Fed's Williams, Musalem, Goolsbee
06:00 - Germany Mar Factory Orders
Consensus: M/M 1.0% (prev 1.0%)
Analysts at Societe Generale noted that after the strong rise in factory orders at the end of last year on the back of the German fiscal stimulus, orders pulled back strongly in January, something that should result in a contraction in Q1. The bank’s experts said that despite the outbreak of the war, surveys signalled continued optimism on new orders in March, which should result in a small monthly improvement. “It is also possible that some companies will have front-loaded orders in March and maybe April to get ahead of future price increases. Looking ahead, downside risks in manufacturing have increased, although Germany will continue to benefit from rising infrastructure and defence spending.”
08:30 – Riksbank Apr Interest Rate Decision
Consensus: On Hold (prev 1.75%)
JPMorgan said it expected the Riksbank to remain at its May meeting. “The Bank has been much less assertive on the need to tighten since the energy shock, reflecting the low inflation backdrop in Sweden. However, the Riksbank was the first in March to publish a scenario showing the impact of a sustained closure of the Strait. This scenario is arguably now playing out, albeit with energy prices that are lower than expected.
On guidance, JP Morgan noted that in March, the Riksbank stated that the policy rate “is expected to remain at this level for some time to come”. Analysts said this was consistent with the rate projection it published at the time, although it now feels like a strong statement to repeat again, given the increasing risk that at least some tightening will be required.
09:00 - Norges Bank Interest Rate Decision
Consensus: 25 BPS Hike (prev 4.00%)
The Norwegian central bank is widely expected to hike the policy rate by 25bp to 4.25% this week. “At the meeting in March, the rate committee stated that ‘..it will likely be appropriate to raise the policy rate at one of the forthcoming monetary policy meetings’ which must be interpreted as the committee foreseeing a rate hike either at the meeting in May or June,” posited Danske Bank analysts. “But we still believe that the hike will be delivered next week because the monetary policy signals are based on a need to anchor inflation expectations, i.e. it is more about the risk assessment than the point estimate of inflation.” The Scandinavian bank’s research team maintained that the rate committee at Norges Bank fears that confidence in monetary policy is weakening, and that households and firms no longer assume that inflation will decline towards the target of 2%. This is reinforced by the fact that two of the five members of the committee voted to hike the policy rate already at the meeting in March.
Speakers: ECB’s de Guindos, Elderson, Lane, Schnabel | BoE’s Lomabrdelli, Mann | Fed’s Hammack, Williams
12:30 – US Apr Nonfarm Payrolls
Consensus: Change 60k (178k)
BMO forecasts nonfarm payroll growth to slow to 70,000 in April after March’s 178,000 increase, which was the largest one-month gain in net jobs in more than a year. “Solid increases in health care, leisure and hospitality, trade and transportation, and construction helped lift payrolls in March,” noted experts at the Canadian bank. “That’s a one-month performance that will be hard to beat, especially as companies prepare for rising input costs and increasing margin pressure from the energy price shock. The ADP weekly employment survey implies some upside risk to our forecast as private sector job growth appears to have accelerated to around 157,000 a month in the second week of April.”
12:30 – Canada Apr Labour Market Report
Consensus: Net Chng 8.2k (prev 14.1k)
TD Securities said, “We look for employment to rise by just 5,000 in April, leaving the unemployment rate stable at 6.7%. Hiring intentions looked a little brighter in the Q1 CSCE, but more timely measures from CFIB and S&P PMIs remain sluggish. Our forecast for 5,000 sits in line with the 6m trend, while wage growth should slow 0.3 percentage point to a still-elevated 4.8% y/y.”
Speakers: BoE’s Bailey | ECB’s Lagarde, de Guindos, Cipollone, Schnabel | Fed’s Cook