This Week: Trade relief, US CPI, UK economic data

Markets opened strong following a US-China trade breakthrough, with major indexes rising on tariff relief optimism. However, upcoming US inflation data and UK economic releases may challenge the rally’s durability.

• US-China agree to slash tariffs for 90 days
• US500, CN50 surge on weekend trade optimism
• US CPI on May 13 may test Fed rate outlook
• Powell speaks May 15, market impact likely
• UK data dump may swing UK100 via GBP moves

Markets may be set for a strong week after a surprise breakthrough in US-China trade talks over the weekend.

At the time of writing US500 index has reached above 5,800.

The US and China agreed to a 90-day tariff reduction, cutting steep levies imposed earlier this year. US tariffs on Chinese goods will drop from 145% to 30%, while China’s tariffs on US imports will fall from 125% to 10%.

Treasury Secretary Scott Bessent called the talks “constructive,” fueling hopes of a broader de-escalation.

With equities rebounding since April, this trade relief adds fresh momentum, but key data this week could test the rally.

Traders are watching Tuesday’s US CPI and Thursday’s UK data dump, which could potentially sharply affect the CN50, US500, and UK100 indexes.

Events Watchlist:

Tuesday, May 13th: US CPI report – US500 index

With the ongoing trade uncertainty, this CPI release carries outsized weight for Fed expectations. A hotter-than-expected print could revive concerns of higher for longer rates, weighing on equities. Conversely, a cooler reading may bolster risk-on trades and potentially push the US500 index towards 5,900.

Also note: Fed Chair Jerome Powell is set to speak Thursday, May 15th. His take on the latest CPI prints and US-China trade talks could be a major swing factor for the US indices.

Thursday, May 15th: UK economic data dump – UK100 index

This data deluge – GDP, trade balance, industrial output – will offer the most comprehensive snapshot yet of the UK economy leading up to the just-announced US-UK trade pact. Should the data disappoint sharply, moving the BOE away from its recent hawkish stance, the weakening Sterling may in turn boost the UK100 index, given the inverse relationship between these 2 assets.

Here’s a comprehensive list of other key economic data and events due this week:

Tuesday, May 13

• AUD: Australia May consumer, business confidence
• JP225: BOJ April meeting summary
• EU50: Germany May ZEW survey
• GBP: UK April jobless claims, March unemployment
• USDInd: US April CPI

Wednesday, May 14

• JPY: Japan April PPI
• NAS100: Fed Vice Chair Jefferson & Governor Waller speeches

Thursday, May 15

• AUD: April unemployment
• EUR: Eurozone 1Q GDP, March industrial production
• GBP: UK 1Q GDP, March industrial production; BOE’s Dhingra speaks
• USDInd: Fed Chair Powell speech
• US500: Walmart earnings, US April retail sales, PPI, industrial production and May jobless claims

Friday, May 16

• JPN225: Japan 1Q GDP
• US400: US May Consumer sentiment