The upcoming week's economic calendar is a relatively light one, offering a breather after the NFP release. However, it's not without its pivotal moments. The U.S. existing home sales release on Monday sets the tone, followed by the Bank of Japan's summary of opinions and U.S. inflation data on Tuesday. The week's pivotal moment, though, is the Fed Chair nomination vote in the U.S. Senate, with Kevin Warsh expected to take over from Jerome Powell on Friday.
In the U.S., the core CPI m/m is projected to rise by 0.3%, with headline CPI m/m expected at 0.6%. This week's CPI data will be closely monitored for how the Middle East conflict is feeding into consumer prices. Increased energy costs are expected to push the y/y figure higher, potentially to 3.7% or even 3.8%, according to some analysts. Food prices are also projected to grow over time due to rising transportation costs and higher prices for agricultural inputs, such as fuel and fertilizers.
Core inflation, which excludes food and energy, is expected to remain firm. Estimates suggest the core CPI could rise by around 0.5% on the month, keeping the annual rate near 2.9%. Much of this increase is likely to come from the services sector. Shelter costs may temporarily rebound due to statistical distortions linked to earlier government shutdown effects, although analysts expect housing inflation to resume its cooling trend as rent data continues to soften.
Services inflation outside of housing remains firm, with higher fuel costs likely to impact airfare prices and put pressure on core CPI. Used car prices may also rebound, although some goods categories that surged in March are expected to moderate. Looking ahead, core inflation is still projected to stay at near 3% for much of 2026, according to Wells Fargo. Underlying pressures remain persistent, but softer shelter costs should help while weaker wage growth may limit companies’ pricing power later in the year.
In Australia, the consensus for the wage price index q/q is 0.8%, with annual wage growth expected to ease slightly to 3.3%. Westpac analysts note wage momentum is cooling modestly, with softer growth in individual wage agreements helping to offset firmer gains from awards and enterprise bargaining agreements. The last two quarterly readings have both come in at 0.8%, marking a step down from the 0.9% pace recorded in the first half of last year.
Markets will also closely watch the upcoming minimum wage and awards decision, as it could influence wage dynamics in the second half of the year. Westpac's forecast for the September quarter is also a 0.8% increase assuming a 4.25% decision.
In the U.K., the consensus for GDP m/m is -0.2%, while preliminary GDP q/q is expected at 0.6%. This week's print is expected to show a modest pullback in March following February’s surprisingly strong growth. However, Q1 growth is still projected to be broadly in line with the BoE's projections. Recent PMIs pointed to softer momentum across both manufacturing and services, with uncertainty related to the Middle East conflict weighing on sentiment.
The BoE continues to signal a cautious approach, balancing slowing growth against persistent inflation risks. There is evidence households and businesses may have front-loaded activity in March due to concerns about upcoming price increases. This means the March print could surprise to the upside without the economy actually accelerating.
Elevated energy and fertilizer costs resulting from the Middle East conflict increase the risk of second-round inflation effects, according to Wells Fargo analysts. As a result, their outlook now accounts for two rate hikes this year.
In the U.S., the consensus for core retail sales m/m is 0.6%, while headline retail sales m/m are also expected at 0.6%. U.S. retail sales are expected to slow notably in April following March’s strong surge, with headline growth supported mainly by higher spending at the pump due to rising gasoline prices rather than real consumer demand in other areas. Softer vehicle sales and signs of weaker discretionary spending point to a more cautious consumer backdrop.
While nominal sales may still appear resilient, underlying spending momentum looks less convincing as inflation continues to erode purchasing power. Consumers are increasingly relying on savings and credit to maintain their spending levels, suggesting that demand could soften further in the months ahead.
In conclusion, the upcoming week's economic calendar is a mix of pivotal moments and relatively light data releases. The U.S. CPI data will be closely monitored for how the Middle East conflict is feeding into consumer prices, while the Fed Chair nomination vote and the U.S. Senate's decision on Kevin Warsh's nomination will be closely watched. The U.K.'s GDP m/m and preliminary GDP q/q data will also be closely monitored, as will the upcoming minimum wage and awards decision in Australia. Overall, the week promises to be a mix of economic insights and pivotal moments.
