In this episode:
- Europe and Global Data Outlook
- Global Monetary Policy Trajectory
- US Dominance Continues
Europe and Global Data Outlook
- Eurozone sentiment slips; national CPIs and German jobs data will test momentum.
- EU tariff strategy under pressure as US talks sour and Trump rhetoric escalates.
- Japan’s inflation surprise sharpens focus on Friday’s data and BoJ normalisation path.
Global Monetary Policy Trajectory
- Fed minutes could reveal growing divergence as fiscal risks re-enter the mix.
- RBNZ, Bank of Korea, and SARB all expected to ease 25bps amid weaker growth signals.
- Market focus shifts back to forward guidance after a trade- and fiscal-led lull.
US Dominance Continues
- Consumer confidence data to gauge sentiment rebound as markets weigh hard data 'catch-down'.
- Senate takes up fiscal bill with narrow margins and high market stakes.
- Trade deadlines loom, pushing EU and Japan talks toward inflection points.
Transcript (AI Generated)
Matt Jones
Welcome to "The Long & Short of the Week Ahead", a production of Eurizon SLJ Capital that takes a look at the macro-economic themes of the week ahead and has been recorded for professional investors.
My name is Matt, Head of Distribution for Eurizon SLJ Capital, and I'm joined by Neil Staines, Senior Portfolio Manager.
Welcome back, Neil. It's great to have you here with us again.
Neil Staines
Thank you very much Matt. It's great to be here.
Matt Jones
Now it's a short week next week with Bank Holiday Monday in the US and the uk, but plenty of action from the rest of the world. So what are we looking for?
Neil Staines
Yeah, thanks very much, Matt. It’s a short week, but it looks set to be an interesting one.
Following this week’s Eurozone PMI data, which suggested further growth moderation in May, next week brings more key indicators of Eurozone economic health. On Monday, we’ll see French CPI, followed later in the week by inflation data from Spain, Italy, and Germany on Friday. We’ll also get the German unemployment rate for May, due Tuesday.
The ECB will release its inflation expectations, and the week kicks off with commentary from Christine Lagarde on Bank Holiday Monday. Meanwhile, President Trump has certainly set the tone heading into the weekend, and EU–US trade negotiations look set to reach fever pitch.
Further afield, Japan offers a packed data calendar on Friday, with unemployment, industrial production, and retail sales figures all due. These will help gauge the state of the Japanese economy following yet another inflation print that was higher than expected and well above target.
Strong data continues to pressure the Bank of Japan to normalise policy. It’s certainly an interesting moment for the yen and Japanese rates. Beyond the data, trade remains in sharp focus—with FX and tariffs major points of contention in US–Japan negotiations. In Europe, the EU returns to the drawing board after its bilateral tariff reduction plans were rejected this week—another development escalated by President Trump heading into the weekend.
So, plenty to watch across Europe and beyond.
Matt Jones
It is also a big week for central banks globally next week. So how are we thinking about the global monetary trajectory?
Neil Staines
Yeah, good question, Matt. It’s a very important point. Monetary policy has taken a bit of a backseat lately, as trade and fiscal policies have dominated the headlines. This week, however, monetary policy may return to a more balanced footing.
We get the FOMC minutes on Wednesday. While Fed commentary around the time of the May 7 meeting was leaning toward growth concerns, more recent rhetoric has become more balanced. Fiscal concerns are now contributing to the case for a pause at this juncture. As with the ECB this week, divergence among committee members will also be closely watched, with the Fed and monetary policy continuing to play a critical role in the broader macro dynamic.
Beyond the Fed, we also have the RBNZ, the Bank of Korea, and the South African Reserve Bank—all expected to cut rates by 25 basis points next week. These moves come against a backdrop of uncertain growth and clearer signs of disinflation. In each case, markets will be highly attuned to the central banks’ discussions and their forward-looking guidance—particularly regarding the balance of risks at this important, though still highly uncertain, juncture.
Matt Jones
And whilst it's another quiet week for US data I suspect that the US will continue to dominate both headlines and sentiment. So how are we thinking about the US next week?
Neil Staines
Yeah, that’s right, Matt. It really is still very much about the US.
Beyond the FOMC minutes, we also get May consumer confidence data—which will be particularly interesting in the context of the soft data versus hard data debate. Consumer confidence has declined sharply in recent months. The big question is: do we see a bounce in May, following the China–US de-escalation-driven rebound in equities, or do confidence levels remain depressed, with markets waiting for hard data to catch down? That will be a major focus next week.
We also get April PCE data, though we’ve already seen most of its component parts via the CPI and PPI prints for the same month—both of which pointed to softer inflationary pressure.
In equities, Nvidia is set to report earnings, effectively wrapping up the Q1 reporting season. So far, results have come in much better than expected. But there are growing concerns about Q2, especially given macro uncertainty and the general lack of forward guidance from corporates.
Still, it’s likely that trade and fiscal developments will once again dominate headlines and market attention. On the trade front, we’re fast approaching the end of the 90-day pause—likely in early July—making progress toward deals, particularly with the EU and Japan, increasingly urgent. We've already seen signs of movement heading into the close on Friday.
On the fiscal side, after the House passed the “big, beautiful bill” this week, next week it's the Senate’s turn to scrutinise and likely amend the legislation. Margins in Congress remain razor-thin, but the market implications are substantial. While we take a generally more sanguine view on deficits, fiscal dynamics will be hugely important for the rest of the year—not just for policy direction, but also for trade, earnings, and data.
All told, it’s shaping up to be another big week for the US.
Matt Jones
Fantastic. Thank you for joining us once again and outlining your thoughts on the week ahead. I look forward to catching up with you again next time.
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