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.
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.
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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%.
