Our TOP 5: You should pay attention to these topics these days
Inflation, stocks, Bank of England, ECB and China - this is what you should know as an investor right now.
Angela Göpfert-MeierMay 9, 2025
With the US Federal Reserve entering its traditional blackout period ahead of its upcoming September meeting, US investors will primarily focus on August inflation numbers for the coming week. The point in time when central banks cut their stimulus measures is an important factor in market sentiment amid concerns over rising inflation. The UK will also release the highly anticipated inflation data, as well as updated employment and retail sales data. Appearances by representatives of the European Central Bank could shed more light on last week's decision to reduce bond purchases. Meanwhile, data from China is likely to underscore that the pace of recovery in the world's second largest economy is slowing. Here are the essentials to start the week. 1\. Inflation in the US The consumer price inflation data due out Tuesday will be the highlight of the economic calendar as a debate continues on whether the current surge in inflation will wear off as the supply-demand imbalance that has fueled price hikes in recent months subsides. Prices slowed in July but remained at a 13-year high year-on-year and there are early signs that inflation has peaked. Market watchers will also be watching Thursday retail sales numbers, which are expected to decline for the second straight month, as well as industrial production reports and University of Michigan consumer sentiment data. 2\. Shares US inflation numbers expected for Tuesday could determine the direction of markets in the coming week amid fears that the continued rise in inflation could lead the US Federal Reserve to cut its stimulus measures. In the past few days, several Fed officials have hinted that the weak August US labor market report alone would not prevent the central bank from tapering its bond purchases later in the year. Despite the prospect of reduced stimulus packages, Mark Haefele, chief investment officer at UBS Global Wealth Management, said he expected central banks to keep interest rates low. "This is positive for the equity markets, especially the cyclical and value-driven areas of the market. And while this makes it difficult to find return, we continue to see opportunities," he wrote in a statement to clients. 3\. British dates Last week, Bank of England Governor Andrew Bailey warned that the UK's economic recovery is slowing, so this week's inflation, employment and retail sales data will be closely watched, especially in the run-up to the upcoming one BoE meeting on September 23. July data shows that inflation slowed to 2% while retail sales were down 2.5% compared to the previous month. With labor shortages and a record 8.8% rise in wages in June, Tuesday's labor market data will also take center stage. The end of the leave arrangements could force people into the labor market, but the shortage of skilled workers carries the risk of increasing price pressures due to supply shortages and raw material prices. 4\. The ECB speakers In the euro zone, both the chief economist of the ECB, Philip Lane, and the governor of the Finnish central bank, Olli Rehn, will have their say. Investors hope to gain more insight into last week's decision to cut bond purchases in the coming quarter. This move is a first small step in reversing the emergency measures the ECB took to prop up the eurozone economy during the coronavirus pandemic. The President of the ECB, Christine Lagarde, stressed that this step is not the beginning of a throttling. Despite the disappointing US labor market report in August, the Fed is expected to follow the ECB's move to reduce bond purchases later this year. 5\. Data from China China on Wednesday will release industrial production, retail sales and fixed investment data that will highlight the economic impact of a widespread Covid outbreak in August that caused Beijing to partially close the world's third largest container port and in some areas of the Country to impose new restrictions. The latest outbreaks have largely been contained, but the Chinese economy continues to face headwinds. While exports remain strong due to robust global demand, domestic demand has stalled due to measures to contain the virus, supply shortages, tougher measures to contain house prices and a campaign to reduce carbon emissions.
