FX Week Ahead Overview:
- The second week of May sees a global focus in the first half and a North American focus in the second half.
- US economic data due in the second half of the week doesn’t appear that it will change the hearts and minds of traders after the disappointing April US jobs report[1].
- Overall, recent changes in retail trader positioning[2] suggest that the US Dollar[3] has a mixed bias.
For the full week ahead, please visit the DailyFX Economic Calendar[4].
05/11 TUESDAY | 01:30 GMT | CNY Inflation Rate (APR)
With respect to any inflation figures anywhere, it’s been widely anticipated that a significant base effect would be making its way through data series over the coming months. China is not excluded from this expectation. Accordingly, the People’s Bank of China may thus look through any spike in the inflation figures that would, in an otherwise normal environment, suggest that a reduction in monetary support might be considered. Due in at +1% from +0.4% (y/y), the headline April Chinese inflation reading may not influence Yuan rates, one way or the other.
Read more: Chinese Yuan Technical Analysis: EUR/CNH, USD/CNH Rates Outlook[5]
05/12 WEDNESDAY | 06:00 GMT | EUR German Inflation Rate (APR)
Germany is Europe’s largest economy, which biases the European Central Bank to be a bit more sensitive to changes in German economic data than most other countries. And with the headline German inflation rate due in at +2% from +1.7% (y/y) for April, it may be the case that ECB policymakers are noticing that the hallowed base effect is coming into play.
If so, further acceleration in headline German (and Eurozone) inflation rates is expected over the coming months,
