We started last week’s Week Ahead saying that many market participants were questioning the gap between stock index record highs and elevated oil prices. That seems to still be the case with the unloved rally in some quarters printing more all-time peaks last week, but an interesting weekly candle printing on charts. Notably the Nasdaq, the tech-heavy index which has been driving broader gains, printed a ‘doij’ with prices closing marginally lower and in the middle of the high-low range over the previous five days. That denotes indecision with neither bulls nor bears winning out amid rising energy prices. The earnings release of the world’s biggest company, Nvidia, should have something to say about the direction of the market, though its impact on the broader indices has increasingly waned.

Will we get any more reaction after the much-hyped Trump-Xi summit? It all felt a little underwhelming truth be told, with markets perhaps looking through POTUS’ incessant discourse, as equities and the CNY both softened on Friday as the summit ended without any major surprises. ‘Constructive strategic stability’ seems to be the key broad theme from the short visit, but ultimately actions speak louder than words. We will be watching for any major breakthroughs towards peace in the Iran conflict and the opening of the Strait, or changes in US arms sales to Taiwan, as they could flag that more progress was achieved behind closed doors than expected.

The push and pull for the dollar we talked about last week finally broke out of its recent range as GBP especially sold off hard on domestic political worries. Bond markets grabbed the headlines as the 10-year gilt rose by more than a quarter percentage point. But this was a global phenomenon with US Treasury yields also rising sharply as well. It seems oil prices are getting more of the market’s attention again, and with them the outlook for central banks, as policy tightening gets increasingly priced in. Can weak economies like the UK and eurozone be able to sustain higher borrowing costs is a key question that lingers in our minds.

In Brief: Major Data Releases of The Week

Monday, 18 May 2026

China Data: The economy remains relatively lacklustre due to muted domestic demand amid ongoing real estate issues. Fixed asset investment could slow further to 1.6%, retail sales are expected to fall below 2%, but industrial production should edge up to 6% supported by strong external demand. 

Tuesday, 19 May 2026

UK Jobs: Unemployment is expected to tick down one-tenth to 4.8% though there are still reliability concerns. Average earnings (ex-bonus) are forecast at 3.1%, with the ongoing downtrend seen continuing while CPI rises due to higher energy costs.

Wednesday, 20 May 2026

UK CPI: The headline and core rates are both expected to fall to 3.1% and 2.7% respectively. April services inflation is predicted to ease to 3.5% from 4.5%. The declines are due to household energy bills dropping on account of government action in the 2025 budget. Rising fuel prices will offset this. There’s currently around a 35% chance of a 25bps BoE rate hike at its mid-June meeting with 80bps over the next 12 months.

FOMC Minutes: The meeting was Jerome Powell’s final one and likely to show growing support within the FOMC to drop its easing bias. The split vote was unusual and historic, and possibly a signal to the incoming Chair Warsh who is expected to want to cut rates early in his tenure.

Nvidia Earnings: NVDA reports after the market close with investors closely watching the metrics given Nvidia’s leadership in AI and hefty weight in major indices. For this quarter, adjusted EPS is seen at $1.78 and revenue at $78.98bn. For the next quarter, profit and revenue are projected at $1.96 and USD 96.78bn, while full-year EPS is seen at $8.36 and revenue at $371.66bn. Nvidia continues to benefit from surging capital expenditure, with the hyperscalers already committing $700bn+ in 2026 so guidance will be crucial and any chatter about CEO Huang’s recent China trip. Options forecast the stocks will move +/- 5.8% on Thursday.

Thursday, 21 May 2026

Australia Jobs: Consensus expects 17.5k jobs to be added in April, similar to the prior print, though the easter holidays may impact.  Some focus will be on the composition, so full-time or part-time jobs after March’s skew towards strength in the former. The unemployment rate is seen steady at 4.9%, with the fall at the start of the year proving temporary. Strong data would push the current odds of a near one in five chance of a June rate rise higher.

Global PMIs: Eurozone data is likely to point to weaker momentum in the economy at the start of the second quarter. This is the dilemma faced by the ECB as the energy shock is pushing inflation higher. The UK composite is expected at 51.7, down from 52.6, as the prior front-loading boost from Iran war fears unwinds.

Friday, 22 May 2026

Japan’s CPI: This May data is shaping up as a key BoJ input, with consensus core CPI at 1.7% and core-core (favoured by policymakers) at 2.2%, though upside risks are building after a sharp PPI rise to 4.9% highlighting rising pass-through pressure. The weak JPY and higher import costs remain the dominant inflation drivers, with focus on service inflation. There’s a 78% chance of a rate hike at the June 16 BoJ meeting.

UK Retail Sales: Sales activity is likely to fall due to the timing of Easter, with food and big-ticket items hit. But frontloading of fuel sales may offset this as motorists headed into the Middle East conflict.