Week Ahead: Economic Indicators (19th May – 23rd May)

Tuesday 20th May
08:30 ET
Canadian CPI for April
The Consumer Price Index is an economic indicator published monthly by Statistics Canada.
It measures the average change over time in the prices paid by Canadian consumers for a fixed basket of goods and services, reflecting the cost of living and purchasing power.
The CPI is widely used to assess inflation and guide monetary policy decisions.

In March 2025, Canada’s annual inflation rate eased to 2.3%, down from 2.6% in February, marking the lowest rate since October 2024.
The deceleration was primarily due to lower prices for travel tours and gasoline. Specifically, gasoline prices fell by 1.6% year-over-year, influenced by declining crude oil prices amid concerns over global demand and increased production by OPEC+ .
Excluding gasoline, the CPI rose 2.5%, slightly down from 2.6% in February.
Shelter costs remained a significant contributor to inflation, increasing by 3.9% year-over-year, while transportation prices rose by 1.2%. Food prices, particularly those purchased from restaurants, saw a notable increase of 3.2%, partly due to the end of temporary GST/HST tax breaks in mid-February .
What to Expect
Canadian Stocks
The moderation in headline inflation may bolster investor confidence, potentially supporting equity markets, especially in interest-sensitive sectors like real estate and consumer discretionary.
Canadian Dollar
A softer inflation reading could lead to a slight depreciation of the Canadian dollar, as markets may anticipate a more dovish stance from the Bank of Canada.
Canadian Government Bonds
Bond yields may decline in response to easing inflation, as investors adjust their expectations for future interest rate movements.
Bank of Canada Policy
While the headline inflation rate has eased, core inflation remains near the Bank’s 2% target. The central bank may adopt a cautious approach, monitoring economic indicators closely before making further policy adjustments. The next interest rate decision will likely consider the balance between supporting economic growth and maintaining price stability.
Reuters

Wednesday 21st May
10:30 ET
US EIA Weekly Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, normally released every Wednesday by the Energy Information Administration, details the amount of crude oil held in storage across the United States.
It provides insights into the supply and demand dynamics of the oil market.
What to Expect
An increase in inventories suggests higher supply or lower demand, potentially leading to lower oil prices. Conversely, a decrease indicates lower supply or higher demand, which can drive prices up.

Thursday 22nd May
08:30 ET
US Weekly Initial & Continued Jobless Claims
The Initial Jobless Claims report, released weekly by the US Department of Labor, measures the number of individuals who filed for unemployment insurance for the first time during the preceding week.
This metric serves as a leading indicator of labor market health.
Continued Jobless Claims, also known as insured unemployment, count the number of people who continue to receive unemployment benefits after their initial claim.
Together, these figures provide insights into the pace of layoffs and the ability of unemployed individuals to find new employment.

For the week ending May 3, 2025, initial jobless claims fell by 13,000 to a seasonally adjusted 228,000, surpassing economists’ expectations of 230,000. This decline partially offset the previous week’s increase, which was influenced by school spring breaks in New York. Continued claims decreased by 29,000 to 1.879 million for the week ending April 26, indicating a slight improvement in the number of individuals remaining on unemployment benefits. Despite these positive signs, the labor market faces headwinds from escalating tariffs and economic uncertainties. The unemployment rate held steady at 4.2% in April, though the median duration of joblessness increased to 10.4 weeks, suggesting that while layoffs remain low, rehiring may be slowing.
What to Expect
US Stocks
The decrease in initial jobless claims may provide a modest boost to investor confidence, particularly in sectors sensitive to labor market conditions. However, ongoing trade tensions and economic uncertainties could temper gains in the broader equity market.
US Dollar
A stable labor market supports the U.S. dollar, as it suggests continued economic resilience. However, concerns over potential inflation from tariffs may introduce volatility in currency markets.
US Government Bonds
The mixed signals from the labor market—declining jobless claims but increasing duration of unemployment—may lead to cautious trading in government bonds. Investors might seek safety in bonds amid economic uncertainties, potentially keeping yields in check.
Federal Reserve Policy
The Federal Reserve maintained interest rates at 4.25%-4.50% in its latest meeting, acknowledging rising risks to both inflation and unemployment. Fed Chair Jerome Powell highlighted that sustained tariffs could lead to higher inflation, slower economic growth, and increased joblessness. While the labor market shows resilience, these factors may influence the Fed’s policy decisions in the coming months.

09:45 ET
US S&P Manufacturing & Services PMI May Prelim
The Purchasing Managers’ Index (PMI), compiled by S&P Global, is a set of economic indicators derived from monthly surveys of private sector companies.
The Manufacturing PMI assesses the performance of the manufacturing sector, while the Services PMI evaluates the service sector. Both indices provide insights into business conditions, including output, new orders, employment, and prices. A reading above 50 indicates expansion, while below 50 signifies contraction.

In April 2025, the S&P Global US Manufacturing PMI was revised down to 50.2, unchanged from March but below the preliminary estimate of 50.7.
This reading signaled only a marginal expansion in the manufacturing sector, as output declined for a second straight month, even as new orders rose for the fourth consecutive month—driven mainly by domestic demand.
New export orders fell at the sharpest pace since November, weighed down by tariff-related pressures.
The S&P Global US Services PMI was revised lower to 50.8 in April 2025 from a preliminary estimate of 51.4, marking the slowest expansion in 17 months. Growth in business activity and new orders weakened amid rising economic uncertainty, particularly over federal trade policies, which also dampened business confidence to a 2.5-year low.
What to Expect
US Stocks
The mixed PMI readings may lead to cautious sentiment in equity markets. While the manufacturing sector shows marginal expansion, the slowdown in services growth could weigh on investor confidence, particularly in sectors sensitive to consumer demand.
US Dollar
The U.S. dollar may experience volatility due to the divergent signals from the manufacturing and services sectors. While the manufacturing PMI indicates slight growth, the deceleration in services could temper expectations for economic strength, influencing currency movements.
US Government Bonds
Bond yields may decline as investors seek safety amid signs of slowing growth in the services sector. However, persistent inflationary pressures, as indicated by rising input costs, could limit the extent of yield decreases.
Federal Reserve Policy
The Federal Reserve faces a complex scenario with marginal growth in manufacturing, a slowdown in services, and ongoing inflationary pressures. These dynamics may prompt the Fed to maintain a cautious stance, balancing the need to support economic growth while keeping inflation in check.

10:00 ET
US Existing Home Sales for April
The Existing Home Sales report, published monthly by the National Association of Realtors (NAR), measures the number of previously owned homes sold in the United States. This includes single-family homes, townhomes, condominiums, and co-ops. The data reflects completed transactions and serves as a key indicator of housing market health and consumer demand.

In March 2025, existing home sales declined by 5.9% month-over-month to a seasonally adjusted annual rate of 4.02 million units, down from 4.27 million in February. Year-over-year, sales decreased by 2.4%. This marks the slowest pace for March since 2009, signaling a challenging spring season for the housing market.
What to Expect
US Stocks
The decline in existing home sales may exert downward pressure on housing-related equities. Investors might anticipate reduced earnings for homebuilders and real estate firms, potentially leading to broader market caution.
US Dollar
A cooling housing market could signal a slowdown in economic growth, potentially weakening the U.S. dollar as investors reassess growth prospects.
US Government Bonds
Weaker housing data may prompt investors to seek the relative safety of government bonds, potentially driving yields lower amid expectations of a more cautious economic outlook.
Federal Reserve Policy
The combination of declining home sales and persistent affordability issues may influence the Federal Reserve’s policy considerations. While inflation remains a concern, signs of a slowing housing market could lead the Fed to adopt a more measured approach to future interest rate adjustments.

Friday 23rd May
10:00 ET
US New Home Sales for April
The New Home Sales report, published monthly by the US Census Bureau and the Department of Housing and Urban Development, measures the number of newly constructed single-family homes with a committed sale during the month.
This indicator reflects the demand for new homes and provides insights into the housing market’s health and broader economic conditions.

In March 2025, sales of new single-family homes rose by 7.4% to a seasonally adjusted annual rate of 724,000 units, up from 674,000 in February. This marks the highest level since September 2024 and represents a 6.0% increase compared to March 2024.

The median sales price of new houses sold in March was $403,600, a 1.9% decrease from February and a 7.5% decline from March 2024. This price reduction is attributed to builders focusing on smaller, more affordable homes to attract buyers amid elevated mortgage rates.

At the end of March, the seasonally adjusted estimate of new houses for sale was 503,000, representing a supply of 8.3 months at the current sales rate. This is slightly up from 8.2 months in March 2024 but down from 8.9 months in February 2025, indicating a modest tightening in inventory.
What to Expect
US Stocks
The increase in new home sales may positively influence housing-related equities, such as homebuilders and construction materials companies. However, broader market reactions may be tempered by ongoing economic uncertainties and elevated interest rates.
US Dollar
A stronger housing market could bolster the U.S. dollar, as it suggests economic resilience. Nevertheless, the impact may be limited if other economic indicators point to slowing growth or persistent inflation.
US Government Bonds
Improved housing data might lead to a modest uptick in bond yields, reflecting increased investor confidence in the economy. However, concerns over inflation and future Federal Reserve actions could influence bond market dynamics.
Federal Reserve Policy
While the rise in new home sales indicates some strength in the housing sector, the Federal Reserve is likely to remain cautious. Persistent inflationary pressures and broader economic uncertainties may lead the Fed to maintain its current policy stance, monitoring data closely before making any adjustments.