Week Ahead: Canada, U.K. and Japan’s Inflation Data in Spotlight

The week starts on Monday, 19 May at 02:00 GMT with the U.S. CB Leading Index MoM, where a smaller decline is expected, suggesting easing recessionary pressure. On Tuesday, 20 May, three key events take place: RBA Interest Rate Decision at 04:30 GMT (expected rate cut to 3.85%), Canada Inflation Rate YoY at 12:30 GMT (forecast to stabilise or slightly rise), and Japan Balance of Trade at 23:50 GMT (expected shift from surplus to deficit).

On Wednesday, 21 May at 06:00 GMT, the U.K. Inflation Rate YoY is expected to rise to 3.3%. On Thursday, 22 May at 23:30 GMT, Japan’s Inflation Rate YoY is likely to remain elevated. The week wraps up on Friday, 23 May, with Canada Retail Sales YoY at 12:30 GMT (growth expected to slow) and U.S. New Home Sales MoM at 14:00 GMT, forecast to decline by 4.7% after March’s surge.

Monday, 19 May 2025: [02:00 GMT] U.S. CB Leading Index MoM

The U.S. Conference Board Leading Economic Index (MoM) declined by 0.7% in March, while the forecast for April points to a smaller drop of 0.2%. This less negative projection suggests that the pace of economic deceleration may be easing. Although the index remains in contraction territory, the narrower decline could indicate that recessionary pressures are softening, possibly due to stronger-than-expected corporate earnings or easing credit conditions that support short-term economic momentum. This data is set to be released on 19 May at 14:00 GMT.

U.S. CB Leading Index MoM Chart , Source: Trading Central)

Top US company earnings: Diageo (DEO), Trip.com (TCOM)

Tuesday, 20 May 2025: [04:30 GMT] RBA Interest Rate Decision, [12:30 GMT] Canada Inflation Rate YoY, [23:50 GMT] Japan Balance of Trade

The Reserve Bank of Australia's (RBA) most recent interest rate decision left the cash rate at 4.1%, while the upcoming decision is expected to see a cut to 3.85%. This anticipated rate reduction likely reflects growing concerns over slowing economic growth, weakening consumer spending, and easing inflationary pressures. With recent data suggesting a softening labour market and subdued wage growth, the RBA may view a rate cut as a necessary step to support domestic demand and prevent a sharper economic slowdown. This data is set to be released on 20 May at 04:30 GMT.

RBA Interest Rate Decision Chart , Source: Trading Central)

As of March 2025, Canada's year-over-year inflation rate stood at 2.3%, down from 2.6% in February. This decline was primarily driven by lower gasoline and travel tour prices, which offset the upward pressure from the reinstatement of the Goods and Services Tax (GST)/ Harmonised Sales Tax (HST) after a temporary holiday ended in mid-February. Looking forward to April’s inflation rate, it may either stabilise around 2.3% or experience a slight uptick. Factors such as ongoing trade tensions, potential fluctuations in energy prices, and the full impact of the reinstated GST/HST could contribute to this outcome. This data is set to be released on 20 May at 12:30 GMT.

Canada Inflation Rate YoY Chart , Source: Trading Central)

Japan recorded a trade surplus of ¥544.1 billion in March, but the trade balance for April is expected to shift into a deficit of approximately ¥200 billion. This anticipated reversal is likely due to seasonal factors and external headwinds. In April, Japanese exports may face headwinds from softer global demand, particularly from China and the U.S. However, imports could increase due to higher energy costs or front-loaded procurement by firms ahead of the Golden Week holidays. This data is set to be released on 20 May at 23:50 GMT.

Japan Balance of Trade Chart , Source: Trading Central)

Top US company earnings: Home Depot (HD), Palo Alto Networks (PANW)

Wednesday, 21 May 2025: [06:00 GMT] U.K. Inflation Rate YoY

The U.K.'s year-over-year inflation rate came in at 2.6% in March, but it is expected to rise to 3.3% in April. This projected increase is largely attributed to base effects from the previous year, particularly the sharp drop in energy prices that occurred in April 2024, which will now drop out of the annual comparison. Additionally, renewed price pressures in sectors such as food, services, and housing, along with the impact of higher wage growth and import costs, are likely contributing to the anticipated uptick. This data is set to be released on 21 May at 06:00 GMT.

U.K. Inflation Rate YoY Chart, Source: Trading Central)

Top US company earnings: TJX (TJX), Loew’s (LOW)

Thursday, 22 May 2025: [23:30 GMT] Japan Inflation Rate YoY

Japan’s year-over-year inflation rate stood at 3.6% in March, and based on early indicators—such as Tokyo’s core CPI rising to 3.4% in April—it is likely that the national inflation rate will remain elevated or even edge higher. The expected persistence of inflation is driven by reduced government subsidies on electricity and gas, as well as widespread food price hikes that took effect at the start of the fiscal year on April 1. This data is set to be released on 22 May at 23:30 GMT.

Japan Inflation Rate YoY Chart, Source: Trading Central)

Top US company earnings: Intuit (INTU), Analog Devices (ADI)

Friday, 23 May 2025: [12:30 GMT] Canada Retail Sales YoY, [14:00 GMT] U.S. New Home Sales MoM

Canada’s retail sales grew by 4.7% year-over-year in February, but the expected growth for March is projected to slow to 3.8%. This anticipated slowdown reflects moderating consumer spending as inflationary pressures continue to impact household budgets. The seasonal factors and the end of certain government stimulus programs may contribute to a more cautious consumer outlook. Despite this, retail sales are still expected to grow, although at a slower pace compared to February’s stronger performance. This data is set to be released on 23 May at 12:30 GMT.

Canada Retail Sales YoY Chart, Source: Trading Central)

U.S. new home sales surged by 7.4% month-over-month in March, but the expected value for April is a decline of -4.7%. This anticipated decrease is likely due to several factors, including rising mortgage rates, which may dampen demand for new homes as borrowing costs increase. Additionally, the seasonal boost seen in March may not be sustained in April, as the market typically experiences fluctuations between months. Higher home prices and limited housing inventory could also contribute to a cooling in sales, making it more difficult for potential buyers to enter the market. Despite the recent surge, these factors point to a natural pullback in April. This data is set to be released on 23 May at 14:00 GMT.

U.S. New Home Sales MoM Chart, Source: Trading Central)

Top US company earnings: PDD Holdings (PDD), Cathay Financial (CHYYY)

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.