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What to Watch - Week of 16 May 2025

It’s RBA week - with all roads pointing to an interest rate cut when the Australian central meets on Tuesday. The question is whether it will a 25bps point trim or a 50bps. The latest Statement on Monetary Policy, which provides more details on central forecasts for the economy, will also be released. Globally, US data is relatively quiet, while the retailers (Home Depot & Target) report numbers. Here’s what to watch in the week ahead.
NAB Markets Research
19 May 2025
Created by potrace 1.15, written by Peter Selinger 2001-2017 3 min read

Taylor Nugent & Tapas Strickland | Markets Research

Past week

  • The big news over the past week was the large reduction in tariffs from the reset on US-China trade
  • Rate cut expectations have been pared, with trade policy developments rather than economic data in the driver’s seat
  • For the record, Q1 Wages rose 0.9% q/q, near the RBA’s expectations, and the unemployment rate was steady at 4.1% despite a surge in employment.

Week ahead

  • Australia, the RBA meets (Tuesday) and is widely expected to cut rates. The uncertainty is whether it will be 25bps or 50bps. Alongside the decision is the latest Statement on Monetary Policy which contains more detailed assessments and the staff’s central forecasts for the economy
  • US data is relatively quiet with most focus likely to be on the ‘big beautiful’ budget bill discussions, and retailer earnings (Home Depot on Tuesday and Target on Thursday) for inflation and consumer anecdotes
  • EZ/UK is where the S&P Global PMIs (Thursday) take most prominence. Also in Europe there is a UK-EU Summit (Monday) and the EC’s latest forecasts for the bloc (Monday). In the UK, CPI (Wednesday) is expected to rise
  • In China the monthly activity figures (Monday) will provide a key guide to momentum amidst heightened uncertainty.
  • NZ has a busy week with mostly second-tier data. The week includes: PSI (Monday), Trade Balance (Wednesday), Budget (Thursday) and Retail Sales Volumes (Friday)

Chart 1: Data surprising to the upside in Australia following WPI and Labour Force

 

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All prices and analysis at 16 May 2025.  This information has been prepared by National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 ("NAB").

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Our markets team is keeping clients informed with award-winning in-depth analysis on the Australian economy, foreign currency, fixed income, credit and commodities markets.