By Dow Jones Newswires staff
Below are the most important global events likely to affect FX and bond markets in the week starting May 18.
Minutes to the U.S. Federal Reserve's most recent meeting will be watched for signs of whether prospects of an interest-rate hike are starting to build given elevated energy prices, while uncertainty about the situation in the Middle East continues.
In Europe, flash estimates of purchasing managers' surveys for May and U.K. inflation data are due, while investors will watch any further developments in U.K. politics as the prime minister's position remains precarious.
Asia's economic calendar will be shaped by clues of how resilient regional growth remains as the Middle East conflict continues to fuel energy-price volatility and cloud the trade outlook, with key data due out of Japan and China.
U.S.
Minutes to the Federal Reserve April meeting are due on Wednesday and could give clues on the outlook for interest rates.
The Fed left rates on hold but three dissenters objected to maintaining a mention in the statement of a bias toward easing interest rates. Investors will be looking to see whether the committee as a whole increasingly view rate cuts as unlikely due to rising inflationary pressures.
Recent robust data on the U.S. economy and signs of growing inflationary pressures are making rate hikes, rather than rate cuts, look increasingly likely. U.S. money markets now price a 64% chance of a 25 basis-point rate increase by year-end and are fully pricing one by March 2027, LSEG data showed.
"The minutes from the April meeting should show considerable discussion about the outlook and risks related to inflation and inflation expectations," HSBC economists said in a note.
Provisional purchasing managers' data on activity in the manufacturing and services sectors during May on Thursday will also be watched for signs of how sentiment is holding up amid elevated energy prices and Middle East uncertainty.
Weekly jobless claims are also due Thursday, alongside April housing starts. The University of Michigan's final consumer survey for May is released Friday.
The U.S. Treasury will auction $16 billion in 20-year bonds on Wednesday and $19 billion in 10-year inflation-protected TIPS on Thursday.
Canada
Canadian consumer-price data for April will be released on Tuesday and might give clues about whether or not the Bank of Canada could need to increase interest rates amid high energy prices.
Money markets price two quarter-point rate hikes in Canada by the end of the year, but many analysts are skeptical that the BOC will need to raise rates, particularly after recent weak Canadian jobs data.
"The degree of [BOC] tightening priced into financial markets is a bit overdone--providing oil prices drop back soon," Capital Economics economist Bradley Saunders said in a note.
Eurozone
Flash estimate purchasing managers data for May will be the week's most important data, due for France, Germany and the eurozone on Thursday.
Final harmonized CPI data for the eurozone for April are due on Wednesday, showing further insight into the depth of the impact of the Middle East conflict and higher oil prices on the eurozone.
"We expect the eurozone's composite PMI to remain in mild contractionary territory (below 50), although higher delivery times (a reflection of supply bottlenecks rather than strong demand) will continue to distort the manufacturing PMI upwards," Daniel Kral, lead economist at Oxford Economics, said in a note. "After an apparently strong first quarter, services PMI is set to weaken as inflation hits consumers' spending power."
Spanish industrial orders and turnover data for March are due on Thursday.
Germany's GfK consumer climate survey for June, France's monthly business survey and the German Ifo business climate index for May are due on Friday. On that day, Germany will also release a detailed breakdown of first-quarter GDP.
Germany will auction April 2031 Bobls on Tuesday and February 2036 Bunds on Wednesday. Other bond issuers include Slovakia on Monday, Finland on Tuesday, as well as Spain and France on Thursday.
U.K.
A busy week for U.K. data lies ahead, with jobs and wages data due Tuesday, consumer-price and producer-price figures for April on Wednesday, followed by provisional purchasing managers' data on activity in the manufacturing and services sectors during May on Thursday.
Inflation is expected to moderate due to favorable base effects and a decline in the energy-price cap, set by the regulator, Investec economist Ryan Djajasaputra said in a note.
"May PMIs will provide timely information on economic conditions in the face of headwinds from the Iran conflict," Djajasaputra said.
The latest batch of data will come after yields on long-dated U.K. government bonds surged to their highest levels in more than a decade as Prime Minister Keir Starmer came under increasing pressure to resign following his party's poor performance in recent local elections. Investors worry that any potential replacement could favor higher public spending.
"U.K. political risk is set to stay live via candidate selection, polling, party dynamics and any clearer timetable for a potential transition away from Starmer," said Patrick Munnelly, strategist at Tickmill Group in a note.
The U.K. will sell August 2031 index-linked gilts on Tuesday and July 2036 gilts on Thursday.
Japan
Government data due Tuesday is expected to show that Japan's economy grew modestly in the January-March period, supported by a recovery in U.S.-bound exports and resilient domestic consumption. Real gross domestic product likely rose 0.4% from the previous quarter, or 1.6% at an annualized rate, according to economists polled by data provider Quick. That compares with 0.3% quarterly growth and a 1.3% annualized expansion in the final quarter of 2025.
"Looking ahead, caution is warranted regarding the risk of increasing downside pressure on the economy, as the negative impacts of rising oil prices and supply constraints--driven by heightened tensions surrounding Iran--begin to surface," said Shunpei Fujita, an economist at Mitsubishi UFJ Research and Consulting.
With the timing of a Bank of Japan interest-rate hike in focus, investors will also scrutinize inflation data due Friday. Consumer prices excluding fresh food likely rose 1.7% in April from a year earlier, according to a Quick poll. The core measure rose 1.8% in March.
Australia
In Australia, investors will focus on April employment data on Thursday as concerns grow that higher interest rates and gasoline prices are slowing demand and weighing on the economy.
Both the Reserve Bank of Australia and the federal government remain relatively optimistic on the labor market, expecting the unemployment rate to rise to around 4.5% from 4.3%.
On Tuesday, the RBA will release minutes from its last policy meeting, where it delivered a third straight interest-rate increase. The RBA remains an outlier among major central banks, most of which have kept rates on hold despite rising inflation.
The RBA has argued that raising the official cash rate was necessary to address inflation pressures that emerged prior to the Iran conflict. The central bank has signaled it remains open-minded about the policy path ahead, noting that its dual mandate of supporting employment and containing inflation.
Still, inflation is expected to peak at 5.0% in the second quarter, well above the RBA's target, and markets continue to brace for further rate hikes. Also Tuesday, RBA Chief Economist Sarah Hunter is scheduled to speak on the economy and is likely to keep the door open for additional rate increases.
China
China will release a slew of economic activity data, which will provide insight into how the world's second-largest economy is coping with a prolonged energy shock from the Middle East conflict, coupled with slowing domestic demand.
According to a poll by The Wall Street Journal, fixed-asset investment growth is expected to have eased in April to 1.6% on year from 1.7% in March, while retail sales growth likely improved to 2.0% from 1.7%. Industrial output growth is projected to have accelerated to 5.9% from 5.7%.
Monday's data will likely highlight the two-speed dynamic in China's economy, with external demand supporting industrial activity while domestic demand remains subdued, said ANZ's head of Asia research Khoon Goh. Firmer manufacturing PMI readings and continued export momentum is likely to support industrial output growth, while rising energy and raw-material costs might continue to weigh on production. April retail sales are expected to rebound modestly, overall consumption remains weak, ANZ added.
Economists at ING said a projected slowdown in fixed-asset investment reflects continued weakness in property investment, with construction activity expected to have contracted by more than 11% on year in April.
China will also release its latest housing price index on Monday, with investors looking for any further signs of property prices bottoming out.
Beijing policymakers are slated to announce the country's latest loan prime rates on Wednesday, with analysts expecting the one-year rate to remain unchanged at 3.00% and the five-year LPR at 3.50%.
ANZ noted that the People's Bank of China removed explicit references to potential policy-rate cuts in its first-quarter monetary policy report. ING economists also pushed back their rate-cut forecast to the fourth quarter, citing rising reflation and a stronger-than-expected first-quarter growth print.
Southeast Asia
Singapore will release its April trade data on Monday. The print for nonoil domestic exports is likely to reflect momentum from the artificial-intelligence boom, despite concerns of supply-chain disruptions due to the conflict in the Middle East, Maybank economist Chua Hak Bin said. First-quarter trade performance will also be released Friday.
Thailand's first-quarter gross domestic product data due Monday is expected to show that growth has slowed. Private consumption likely moderated, as fiscal stimulus support waned, said ANZ Research's Kausani Basak, noting the tourism sector's revenue also contracted. "Going forward, Thailand's tourism sector will remain a drag on growth as the geopolitical conflict persists," ANZ said.
In Malaysia, its inflation print and trade data will also be closely watched. Higher fuel prices could push April's inflation reading slightly higher to 1.9% from 1.7% in March, as most of the surge in global crude oil prices has been absorbed by the government through fuel subsidies, Barclays said. Exports are expected to have stayed resilient in April, supported by robust chip demand.
In Indonesia, Bank Indonesia is expected to raise its policy rate by 25 basis points on Wednesday, Citi analyst Helmi Arman said. That would mark a shift from a previously expected pause, with the revision driven by persistent forex market pressure, rising private sector dollar demand and the effects of policy measures currently in place waning. A larger hike may be unlikely, he said, as the central bank's inflation targets remain intact. A pause is also on the cards if the government issues significant foreign currency bonds, Citi said.
Any references to days are in local times.
Write to Jessica Fleetham at jessica.fleetham@wsj.com and Jihye Lee at jihye.lee@wsj.com
(END) Dow Jones Newswires
May 17, 2026 17:00 ET (21:00 GMT)
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