Key events to watch in the week ahead: 12 – 18 May 2025

This week’s overview

US equities ended the week broadly flat, as market participants digest the latest trade agreement with the UK, alongside the Federal Reserve (Fed)’s expected decision to keep rates on hold while acknowledging risks to its dual mandate from US tariffs. Attention now turns to this weekend's talks between US and Chinese officials, with hopes rising for a potential easing of trade tensions. On the domestic front, bank earnings were in the spotlight. While there were initial signs of a softening in earnings momentum, the broader takeaway remained one of underlying resilience in their businesses.

Heading into the new week, here are five key events to watch.

US Q1 earnings season: JD.com, Tencent, Alibaba, Walmart

As the earnings season winds down in the coming week, attention will shift to key reports from Chinese companies such as JD.com, Tencent, and Alibaba, offering crucial insights into the strength of China's consumer demand and the growth prospects for the country’s cloud computing and artificial intelligence (AI) sectors.

13 May 2025 (Tuesday, 8.30pm SGT): US consumer price index (CPI)

US inflation eased for a second consecutive month in March, with headline CPI slowing to 2.4% year-on-year from 2.8% previously—its lowest level since September 2024. A continued moderation in shelter inflation and lower gasoline prices helped offset a pickup in food inflation. Core CPI also cooled, coming in at 2.8% from 3.1% prior, marking the smallest 12-month gain since March 2021.

Looking ahead, President Donald Trump’s tariff agenda and global trade uncertainties risk stalling further disinflation progress, potentially challenging both sides of the Fed's dual mandate. Markets are currently pricing for a 25 basis point (bp) rate cut in July, with a total of three such cuts expected by year-end—more dovish than the Fed’s own projection of two.

Sustained moderation in inflation will be crucial to validate such market pricing. Expectations for April suggest headline and core CPI will remain unchanged year-on-year at 2.4% and 2.8% respectively, while both are forecast to rise 0.3% month-on-month.

15 May 2025 (Thursday, 9.30am SGT): Australia’s employment change

In March, the Australian economy added 32,200 jobs, falling short of the market's expectation for a 40,000 increase. The unemployment rate edged up to 4.1% from a downwardly revised 4.0% in February, as the participation rate rose to a four-month high of 66.8%.

At its April policy meeting, the Reserve Bank of Australia (RBA) kept interest rates on hold and noted that labour market conditions “remain tight.” It also reiterated that it would continue to closely monitor developments in the global economy and financial markets, domestic demand trends, and the outlook for inflation and the labour market when assessing the policy outlook.

For April, consensus expectations point to a 20,000 job gain and an unchanged unemployment rate of 4.1%. If the data prints broadly in line with expectations, the RBA is likely to deliver a 25 bp rate cut at its next meeting on May 20.

16 May 2025 (Friday, 7.50am SGT): Japan’s gross domestic product (GDP)

Japan’s economy is expected to contract by an annualised 0.2% in Q1 2025, reversing the 2.2% growth recorded in Q4 2024 and marking the first decline since Q1 2024. The contraction is expected to be driven entirely by a 0.6% drag from net exports—down sharply from a 0.7% contribution in the previous quarter.

This reflects a likely surge in imports outpacing exports, as firms continued to front-load shipments ahead of anticipated US tariffs. The negative trade balance is seen more than offsetting modest gains in domestic demand, with private consumption projected to rise 0.1% (vs 0.0% in Q4) and capital expenditure estimated to grow 0.8% (vs 0.6% in Q4).

Last week, the Bank of Japan held rates steady and lowered its growth outlook, citing heightened uncertainty around global trade and the impact of US tariffs on exports. Markets now widely expect the BoJ to keep rates unchanged for the remainder of the year, and a weak GDP print would likely reinforce that view.

17 May 2025 (Friday, 10pm SGT): US preliminary University of Michigan (UoM) consumer sentiment

The revised UoM Consumer Sentiment Index for April 2025 came in at 52.2, slightly above the preliminary estimate of 50.8 but still down 9% from March’s reading of 57.0. This marks the fourth consecutive monthly decline, reflecting heightened consumer concerns across multiple fronts, largely driven by ongoing uncertainty surrounding trade policy and the risk of a renewed inflation surge.

However, with trade rhetoric showing signs of improvement and hopes rising for formalised trade agreements, sentiment may look to stabilise. Given that consumer spending accounts for roughly two-thirds of US GDP, any rebound in sentiment could help ease some of the prevailing growth concerns. The upcoming preliminary reading for May is expected to edge up to 53.1, from April’s final print of 52.2.