The upcoming week is poised to be a significant one for global markets, with investors keenly awaiting Nvidia's highly anticipated earnings report and crucial inflation data from the United Kingdom, Canada, and Japan. These releases are expected to provide key insights into the health of the technology sector, particularly the booming artificial intelligence (AI) landscape, and offer a clearer picture of price pressures and economic trajectories in major economies, potentially influencing central bank policy decisions.
Nvidia, a titan in the semiconductor industry and a leader in AI hardware, is scheduled to release its quarterly earnings on Wednesday, May 20th. The company's performance is widely viewed as a bellwether for the broader technology sector and the rapidly expanding AI industry. Investors will be scrutinizing key metrics such as revenue, earnings per share, and forward guidance to gauge the sustained demand for its advanced chips. Nvidia has already secured substantial capital expenditure commitments from major technology players, including Amazon, Google, Meta, and Microsoft, with projections indicating commitments of USD 695-725 billion for 2026. CEO Jensen Huang has previously highlighted robust demand for Nvidia's Blackwell and Rubin platforms, estimating at least USD 1 trillion in demand through 2027, a figure he believes could be even higher. In its last earnings report, Nvidia provided Q1 revenue guidance between USD 76.44 billion and USD 79.56 billion, surpassing the consensus estimate of USD 72.78 billion. For the current quarter, adjusted earnings per share are projected at USD 1.78, with revenue expected to reach USD 78.98 billion. Looking ahead to the next quarter, profit is forecasted at USD 1.96 per share and revenue at USD 96.78 billion. For the full fiscal year, EPS is anticipated to be USD 8.36, with revenue projected at USD 371.66 billion. Nvidia's stock has experienced a significant rally, climbing 20% in the past month and 26.5% year-to-date, reaching new record highs. Analysts at Cantor Fitzgerald have reiterated an 'Overweight' rating and maintained Nvidia as a 'Top Pick,' raising their price target to USD 350 from USD 300. CEO Huang's recent visit to China may also be a topic of discussion, though reports indicate that the H200 chip was not a subject of discussion with U.S. President Trump.
The United Kingdom's economic calendar features the release of April's inflation data on Wednesday. In March, the Consumer Price Index (CPI) registered at 3.3% year-on-year, a slight increase from 3.0% in February. While core inflation figures were cooler than expected, the crucial services component saw a more significant increase than anticipated. However, this rise may be partly attributed to the early Easter holiday and could be partially reversed in April. Recent Purchasing Managers' Index (PMI) data for April indicated the "strongest rate of input price inflation since November 2022," driven by higher transportation and salary costs, with customers reacting to fuel surcharges. These figures are of concern to the Bank of England (BoE), particularly the heightened salary costs, which support current hawkish market pricing. The upcoming April inflation figures will be closely watched to see if price pressures have intensified further and if they are beginning to spread throughout the economy, indicating potential second-round effects. The BoE recently held its base rate at 3.75% in an 8-1 decision. The bank outlined three scenarios for future interest rates, with projected Q2 2026 views of 3.1%, 3.1%, and 3.6% respectively. An uptick in April's inflation from March's 3.3% would align with the third scenario, potentially leading to a hawkish repricing and increasing the likelihood of a near-term rate hike. However, there is a possibility of a cooler print for April due to annual changes implemented that year, although any respite is expected to be temporary as the impact of energy price shocks filters through.
Canada's economic calendar includes inflation data for April on Tuesday. Recent commentary from the Bank of Canada (BoC) suggests that interest rates may need to be increased further if energy prices remain elevated and contribute to broader inflation. The BoC also maintains the option to lower rates if the United States imposes additional trade restrictions on Canada. The upcoming inflation data will be crucial for signs of inflation spreading through the economy, similar to trends observed in the U.S. The review of the USMCA trade agreement, scheduled for July 1st, poses a risk if U.S. President Trump decides to implement more trade restrictions on Canada. This uncertainty contributes to the BoC's preference for keeping rates on hold while it assesses the evolving situation. Investors will be looking for indications of inflationary pressures beyond energy costs.
In Japan, attention will be on the Gross Domestic Product (GDP) figures for the first quarter, released on Tuesday, and inflation data for April, due on Friday. The Q1 GDP is anticipated to show a modest pickup, with consensus estimates around 0.4-0.5% quarter-on-quarter, or 1.7-1.8% on an annualized basis, an improvement from the previous quarter's 0.3%. Growth is expected to be primarily driven by exports, while domestic demand, including consumption and capital expenditure, is projected to remain subdued at around 0.2%. The key question is whether the data will confirm a clear acceleration in economic activity or reveal a persistent weakness in the underlying domestic economy. The impact of the Middle East energy shock is unlikely to be fully reflected in the Q1 data but presents a clear downside risk for the second quarter. The April CPI data will be a critical input for the Bank of Japan (BoJ). Consensus core CPI is around 1.4-1.8% year-on-year, with upside risks building following a sharp rise in the Producer Price Index (PPI) to 4.9% from 2.9%, indicating increasing cost-pass-through pressures. The persistently weak Japanese Yen (JPY) and higher import costs continue to be the primary drivers of inflation. Furthermore, the tapering of energy subsidies is expected to add approximately 0.4-0.5 percentage points to the headline inflation rate in the coming months. Bank forecasts for inflation are varied but slightly skewed higher, with Nomura projecting around 1.5%, Mizuho around 1.7%, and MUFG around 1.8%. The focus will be on whether these figures will prompt the BoJ to adjust its ultra-loose monetary policy stance.
Other notable economic events include the release of the Reserve Bank of Australia (RBA) minutes on Tuesday, which will shed light on the central bank's deliberations during its May meeting. The RBA raised its cash rate by 25 basis points to 4.35% in May, reinforcing its commitment to tightening monetary policy. The RBA anticipates inflation to peak around 4.8% in June and not return to its target range until mid-2027, with the Middle East conflict adding a stagflationary impulse through higher energy costs. The decision was made by an 8-1 vote, indicating strong internal consensus. However, RBA Governor Bullock adopted a slightly more dovish tone in the post-meeting press conference, suggesting there was "space to watch" after recent rate hikes and cautioning that fiscal support could hinder inflation control efforts. Australia's labor data for April, due on Thursday, is expected to show a steady print, with employment anticipated around +20,000 and the unemployment rate holding at 4.3%, with participation near 66.8%. The RBA views the labor market as tight, leading to an asymmetric reaction function. Stronger data, such as employment exceeding 30,000 or unemployment falling to 4.2%, would increase the risk of a June rate hike, while softer data, with unemployment drifting towards 4.5%, would reduce pressure for further tightening. The composition of job growth, particularly the balance between full-time and part-time employment, remains a key focus after March's data showed a strong skew towards full-time gains.
The Eurozone's economic calendar includes the final April inflation figures on Wednesday and the May Flash PMIs on Thursday. The April inflation data will be closely watched by the European Central Bank (ECB) for signs that price increases are spilling over into other areas of the economy and for any indication that the economy is nearing a contraction rather than just stagnation. The ECB is widely expected to tighten policy in June, based on guidance from its last meeting and subsequent remarks from policymakers. The May Flash PMIs, while unlikely to alter the June policy decision, could influence the degree of dissent in upcoming deliberations. The April PMIs revealed significant weakness, with the Composite PMI at a 17-month low and the Services PMI at a 62-month low. The series confirmed the bloc was moving into a decline with the pre-war recovery derailed. For the ECB, policymakers will be attentive to any signs that price increases are passing through into other areas of the economy, and then for any signs that the economy is moving closer to a contraction as opposed to just a stagnation. The ECB is on course to tighten policy in June, given the guidance at the last meeting and subsequent remarks from policymakers. The May Flash PMIs will not change the outcome, with focus more on recent remarks from policymakers, but could influence the degree of dissent in upcoming deliberations, irrespective of the actual outcome.
In China, the Loan Prime Rates (LPR) announcement on Wednesday is expected to see the benchmark rates remain unchanged. The one-year LPR is anticipated to stay at 3.00%, and the five-year LPR at 3.50%. The People's Bank of China (PBoC) has maintained these rates for eleven consecutive months, with regular liquidity operations suggesting this trend will continue. Recent PBoC actions, including guidance to banks to increase lending in April and a notice to expand technology innovation and equipment upgrade loans, indicate a supportive stance for economic activity. Encouraging recent Chinese data, such as PMI and trade figures exceeding forecasts, along with firmer inflation data, suggest limited urgency for policy adjustments. Consumer inflation and factory gate prices accelerated in April, further supporting the view of stable LPRs. However, the PBoC has stated its intention to reform and improve the LPR mechanism to better reflect actual lending rates and strengthen coordination between monetary and fiscal policy, maintaining an appropriately loose monetary policy stance.
Looking at other economic indicators, the UK will also release its April labor data on Tuesday, following a drop in the unemployment rate to 4.9% in February from 5.2%, defying expectations. While wage metrics were hotter than expected, they still cooled from the prior period. Policymakers noted that it would take time to gain insight into the wage implications of the Middle East shock, as wage setting typically occurs in the spring. The UK will also release its April retail sales figures on Friday. In the Eurozone, the final April inflation figures are due on Wednesday, and the May Flash PMIs on Thursday. The April inflation data will be closely watched by the European Central Bank (ECB) for signs of price increases spilling over into other economic areas and for any indication of a move towards contraction rather than stagnation. The May Flash PMIs, while unlikely to alter the June policy decision, could influence the degree of dissent in upcoming deliberations. The April PMIs revealed significant weakness, with the Composite PMI at a 17-month low and the Services PMI at a 62-month low, confirming the bloc was moving into a decline.
On Tuesday, Japan's Capacity Utilisation and Industrial Production (final) for March will be released, alongside the UK's March jobs report. Canada's April inflation data is also due on Tuesday. On Wednesday, Germany's PPI for April will be released, along with South Africa's inflation data for April and the Eurozone's final April inflation figures. New Zealand's Balance of Trade for April is also scheduled for Wednesday. Thursday will see the release of Global Flash PMIs for May, Japan's Balance of Trade for April, and Sweden's Unemployment Rate for April. The US will release its Building Permits for April, Jobless Claims for May 16th, the Philly Fed Index for May, and the Kansas Fed Index for May. New Zealand's Retail Sales for Q1 are also due on Thursday. Finally, on Friday, the Euro Area will release its Indicator of Negotiated Wage Rates for Q1 2026. Japan's April inflation data is a key input for the BoJ, with consensus core CPI around 1.4-1.8% year-on-year, though upside risks are building after a sharp PPI rise to 4.9% from 2.9%, highlighting rising pass-through pressure. The weak JPY and higher import costs remain the dominant inflation drivers, while tapering energy subsidies are expected to add about 0.4-0.5 percentage points to the headline rate in the coming months. German GDP (final) for Q1, UK Retail Sales for April, and German Ifo for May will also be released on Friday. The UoM Survey final for May will also be released. Canadian Retail Sales for April are also due on Friday.
