On Monday, China's economic data for April, including retail sales and industrial figures, will be released first, followed by S&P Global announcing the PMI Index for major economies on Thursday. The market widely expects that tariffs will suppress global growth and increase inflation. In addition, the G7 finance ministers will meet in Canada on Tuesday, possibly leading to a collective assessment of trade impacts.
The 90-day "truce period" of the Trump trade war is halfway over, and a series of economic data set to be released next week will reveal the true impact of tariffs.
On Monday, China's April retail sales and industrial economic data will be released first, followed by S&P Global announcing the PMI Index for major economies on Thursday. These data will collectively outline the substantial impact of US tariff policy on global growth.
On Tuesday, finance ministers from the G7 will meet in Canada, which may lead to a collective assessment of the trade shocks, provided they can reach an agreement on a communiqué.
Additionally, the European Commission will release economic forecasts on Monday, and the European Central Bank will provide an assessment of financial stability impacts two days later.
According to S&P Global data, the global PMI has dropped to a 17-month low in April, while next week's events and reports will focus on showcasing the shockwaves caused by Trump’s tariffs.
Attention will be on whether the PMI shows a slowdown in growth and rising inflation.
Although China's data reflects the situation in April, the PMI figures from S&P Global are for May and will provide a preliminary assessment of economic activity that includes Australia, Japan, the Eurozone, the United Kingdom, and the USA.
On the China side, a series of economic data will be released on Monday, with China's retail in April expected to be stronger and the unemployment rate remaining unchanged. On the USA side, weekly unemployment claims data will be released on Thursday, along with S&P Global's preliminary survey of manufacturing and service providers for May. According to economists' predictions, industrial weakness may continue, while service sector activity may see slight improvement.
Economists Chris Williamson and Jingyi Pan from S&P Global stated in the report:
The international trade environment remains highly uncertain, with markets widely expecting these tariffs to suppress global growth and elevate inflation.
Bloomberg economists pointed out:
April import prices indicate that the USA continues to pay most of the tariff costs. Although little is known about the changes in the trade patterns for April, the import price index excluding tariff costs has changed little since the beginning of the year. This suggests that the basic prices paid by American importers are the same as when there were no tariffs, plus the tariffs.
However, as the USA negotiates to set tariff levels, global business relationships remain tumultuous, with evidence showing that even the mere expectation of Trump's trade offensive has distorted businesses. Data from Friday showed that exports from the EU to the USA grew by nearly 60% year-on-year in March, with companies rushing to pre-ship before the tariffs were announced.
In addition to trade-related data, this week's global economic focus also includes housing data from the USA, inflation data from Japan to the United Kingdom and Canada, possible interest rate cuts in Australia, and the minutes from the European Central Bank's April policy meeting.
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