Following a quieter, holiday-shortened week, financial markets are bracing for a significant uptick in volatility as the final days of April unfold. While geopolitical developments continue to hover over market sentiment, the attention in the coming days will largely shift back toward economic fundamentals. A packed macroeconomic calendar is set to drive price action, with critical updates expected from the United States, key inflation data releases globally, and a major interest rate decision from the Bank of Japan. Meanwhile, ongoing discussions surrounding US-China tariffs remain a persistent backdrop, capable of stirring markets with little warning.
As we approach the end of the month, a series of high-impact economic releases, including employment reports, GDP readings, and inflation indicators, are poised to offer a clearer picture of the global economic outlook. Below is the detailed, day-by-day breakdown of what to watch this week:
🌍Key Market Themes and Developments to Watch This Week:
Trade Tensions Remain Front and Center:
While some optimism emerged last week regarding the possibility of tariff reductions between the US and China, conflicting narratives and a lack of concrete developments continue to cloud the outlook. Any breaking headlines could trigger sharp swings in market sentiment.
Federal Reserve Caution:
Despite cooling inflationary pressures, Federal Reserve officials have signaled that rate cuts remain unlikely in May. Markets are currently pricing in the first potential cut around June or July. Policymakers remain wary of acting prematurely given the lingering impact of tariffs and the complex interplay between inflation and growth dynamics.
Safe Haven Dynamics:
Last week saw a modest pullback in traditional safe haven assets such as gold, the Japanese yen, and the Swiss franc. However, given the fragile backdrop, investor appetite for safety could quickly resurface if data disappoints or geopolitical tensions escalate.
Equity Markets at a Crossroads:
US stock indices ended last week with mixed performances. While the S&P 500 continues to edge higher, technical resistance levels loom, and a slowing economy could challenge further gains.
Gold Holding Strong:
Despite a recent pause, gold remains a favored asset for many investors amid ongoing macroeconomic uncertainties, with prices holding near all-time highs. Any renewed risk-off sentiment could see a fresh surge in demand for the yellow metal.
📅 Monday, 28 April 2025
- Political Developments in Canada:
- The focus for Monday will be limited, with most global markets facing a relatively subdued session. However, Canadian dollar traders will be keeping a close watch on political headlines as Canada holds its Federal Election, an event that could introduce some localized volatility depending on the outcome.
- Lower Liquidity in Asia:
- Japanese markets will be closed due to a public holiday, leading to lighter liquidity across Asian trading hours, which may create pockets of increased volatility.
- Limited European Data:
- In Europe, attention will briefly turn to Spain with the release of the Flash Consumer Price Index (CPI) and preliminary Gross Domestic Product (GDP) numbers. While important, these releases are unlikely to trigger major market moves on their own.
- Early US Data Releases:
- As the US session kicks off, the calendar becomes more active. The Job Openings and Labor Turnover Survey (JOLTS) data will offer an early glimpse into labor market strength, complemented by the Conference Board’s Consumer Confidence reading, providing insight into household sentiment and future spending patterns.
📅 Tuesday, 29 April 2025
- Quiet Start:
- Tuesday is expected to be relatively calm compared to the rest of the week, with no major economic releases scheduled during the Asian and European sessions.
- Continued Focus on Political Developments and Trade:
- Market sentiment may remain sensitive to ongoing US-China trade headlines, especially following remarks last week suggesting that tariff de-escalation could be “very near,” though conflicting reports from Chinese officials add an element of uncertainty.
📅 Wednesday, 30 April 2025
- Australian Inflation Data:
- The Asian session will begin with Australian CPI figures. As inflation remains a critical factor in shaping Reserve Bank of Australia policy, any surprises here could reverberate across currency markets.
- Chinese Manufacturing and Services Activity:
- Shortly after, China will release official Manufacturing and Non-Manufacturing Purchasing Managers’ Index (PMI) readings. These figures will be closely analyzed for signs of economic momentum or slowdown amid ongoing trade pressures.
- German Inflation Data:
- After the London open, attention will shift to Germany with the release of Preliminary CPI data for April, providing further insight into the inflationary trends within Europe’s largest economy.
- US Economic Bonanza:
- Wednesday marks one of the busiest sessions for US data this week. Key releases include:
- ADP Non-Farm Employment Change: A precursor to Friday’s Non-Farm Payrolls report, offering an early snapshot of private sector hiring.
- Advance GDP Estimate (Q1 2025):
Growth is expected to have slowed sharply, with estimates suggesting an annualized rate of 0.4%, down significantly from the previous quarter.
Notably, alternate projections such as the Atlanta Fed’s GDPNow model hint at a possible contraction, underscoring the downside risks facing the economy. - Employment Cost Index:
This indicator will help gauge wage pressures and their potential impact on inflation. - Canadian GDP:
Canada will also report GDP figures, adding another layer of interest for North American traders. - Core PCE Price Index:
Perhaps the most critical release for the US Federal Reserve, this measure of inflation is expected to show signs of cooling both month-on-month and year-on-year. - Pending Home Sales:
The housing market remains a sensitive area of the economy, and any softness could further fuel concerns about slowing growth.
📅 Thursday, 1 May 2025
- Bank of Japan Monetary Policy Decision:
- Asian markets will kick off with a pivotal moment as the Bank of Japan delivers its latest interest rate decision. Given the ongoing challenges faced by the Japanese economy, including stubbornly low inflation and sluggish growth, policymakers’ tone and guidance will be crucial.
- Holiday-Thinned Trading in Europe:
- Several major European markets, including France, Germany, and Italy, will be closed for the May Day holiday, resulting in thinner liquidity that could exaggerate market reactions to any unexpected news.
- US Weekly Labor Market Update:
- In the New York session, the latest Weekly Initial Jobless Claims numbers will be released, providing a fresh pulse check on the health of the labor market.
- ISM Manufacturing Survey:
- The Institute for Supply Management’s Manufacturing PMI and Prices Paid Index will round out the day, offering critical insights into business activity and inflationary pressures in the industrial sector.
📅 Friday, 2 May 2025
- Non-Farm Payrolls Day:
The highlight of the week arrives with the release of the US Non-Farm Payrolls (NFP) report. Markets are bracing for a potential slowdown in hiring:
Job Additions:
Consensus estimates suggest the US economy added 120,000 jobs in April, a deceleration from the 228,000 reported in March.
Forecasts range widely, from 50,000 to 150,000, underscoring the uncertainty around this release.
Unemployment Rate:
The unemployment rate is expected to hold steady at 4.2%, maintaining its relatively low historical level despite some softening in economic data.
Wage Growth:
Average Hourly Earnings are anticipated to rise 0.3% month-over-month and 3.9% year-over-year, signaling that wage pressures persist even amid a slower hiring backdrop.
Potential Market Volatility:
As always, deviations from expectations in any of these figures—jobs growth, unemployment rate, or wage inflation—could prompt swift and significant market reactions across equities, bonds, currencies, and commodities.
