Global markets rebounded last week on a broad-based rally amid signs of de-escalation in the US-China trade war. Investors will continue to monitor major economic data this week, including the eurozone’s monthly inflation figures and the United States’ jobs report.
Additionally, major US technology companies, including Meta, Microsoft, Amazon, and Apple, are set to report their quarterly earnings. The market will particularly focus on Apple, as the company may face challenges stemming from the trade war.
What to watch in Europe
The eurozone is scheduled to release its flash Consumer Price Index (CPI) for April this Friday. Annual inflation in the Eurozone fell to 2.2% in March, easing from 2.3% in the previous month and marking the lowest level since November 2024. Core inflation, which excludes energy, food, alcohol, and tobacco, also cooled to 2.4% from 2.6% in February, the slowest pace since October 2021. Consumer prices declined across most major European economies, including Germany, Spain, the Netherlands, and Belgium. However, inflation remained steady in France and accelerated in Italy in March. Major economies, including Spain, Germany, France, and Italy, will also release preliminary inflation and Gross Domestic Product (GDP) figures for the first quarter. The GDP growth data will be critical for gauging the eurozone’s economic trajectory.
Consensus suggests that eurozone inflation may continue retreating to 2.1% in April, although core CPI is expected to rise slightly to 2.5%. Nonetheless, consumer prices appear on track to return to the European Central Bank (ECB)’s 2% target.
ECB President Christine Lagarde recently stated that the disinflation process in the eurozone is nearly complete and the bank will continue its “data-dependent” approach regarding interest rate decisions. However, US tariffs have deteriorated the region’s economic outlook, requiring the ECB to adopt a more accommodative monetary policy stance. Officials at the International Monetary Fund (IMF) noted last week that the negative impact of US tariffs on the eurozone’s economic outlook is more significant than the positive effect of the bloc’s fiscal reforms.
The ECB has cut interest rates seven times since June last year, bringing the key deposit rate down to 2.25%. Analysts expect the bank to reduce the rate once more in June and maintain it at 2% for the remainder of the year.
What to watch in the United States
In the US, first-quarter GDP figures and April’s non-farm payrolls will be the focal points for financial markets. The American economy added 228,000 jobs in March, far exceeding expectations, although the unemployment rate rose to 4.2% from 4.1% due to a higher participation rate. Stronger-than-expected job growth eased concerns that the US was falling into recession earlier in April. However, with tariffs now taking effect—albeit at a lower rate for most countries—the economic impact could become more pronounced, making the latest job data critical for market sentiment. Consensus estimates suggest 129,000 jobs were added to the labour force in April, with the unemployment rate expected to remain at 4.2%.
The US will also release its advance GDP estimate for the first quarter, with economists forecasting a sharp slowdown as tariff-driven economic uncertainty bites. Expectations are for the economy to have grown by only 0.3%, compared with 2.4% in the final quarter of last year. Furthermore, the US Personal Consumption Expenditure (PCE) data, the Federal Reserve’s preferred measure of inflation, will also be closely watched.
As for Apple’s fiscal second-quarter earnings, the company is expected to report 4% year-on-year revenue growth and a 5% annual increase in earnings. Sales may have been bolstered ahead of tariffs taking effect, especially as Trump exempted electronic products from the 125% tariffs on China. However, Apple still faces 20% import duties on goods manufactured in China, where it produces most of its products. The company reportedly plans to shift all US-sold iPhone production to India by the end of 2026.
What to watch in the Asia-Pacific region
In the Asia-Pacific region, attention will centre on the Bank of Japan’s (BOJ) rate decision this week. The BOJ is expected to keep interest rates steady amid mounting economic concerns linked to US tariffs. Governor Kazuo Ueda stated last week that the bank would continue raising rates if underlying inflation moves towards its 2% target. However, he noted that tariffs would likely impact the stability of consumer prices and weigh on economic growth.
Elsewhere, investors will closely watch China’s manufacturing and services Purchasing Managers’ Indices (PMIs) for April and Australia’s first-quarter CPI, both due for release on Wednesday.