Market Outlook for the Week of April 28 to May 2 2025

The upcoming week starts relatively calmly in terms of scheduled economic data, but markets remain alert to potential surprise announcements from the US government, particularly regarding possible retaliatory tariffs.

On Monday, Canada holds its general elections.
On Tuesday, the US will release the JOLTS Job Openings Report and the Conference Board Consumer Confidence Index.

On Wednesday, the focus shifts to Australia with the release of important inflation data. In the US, the ADP Nonfarm Employment Change, preliminary quarterly GDP, and the Core PCE Price Index (MoM) are due.

On Thursday, attention turns to the Bank of Japan’s (BoJ) monetary policy decision. European markets will be closed for Labor Day. The US will publish initial jobless claims and the ISM Manufacturing PMI.

On Friday, the spotlight will be on the US labor market with the release of average hourly earnings (MoM), nonfarm payrolls, and the unemployment rate.

US Consumer Confidence

The forecast for the Conference Board Consumer Confidence Index is 87.4 points, down from 92.9 the previous month.
The decline is mainly driven by concerns over tariff-related price increases and negative effects of stock market weakness on household wealth and savings.

Australian Inflation Trends

The forecast for Australia's quarterly CPI is a 0.8% increase (previously 0.2%), while the annual CPI is expected to come in at 2.3%, down slightly from 2.4%.
The Trimmed Mean CPI (quarterly) is projected at 0.6%, slightly above the previous 0.5%.

Analysts note that government measures like energy subsidies are unlikely to significantly impact this quarter's figures.

The Trimmed Mean CPI — a key measure for core inflation — is expected to rise 0.6%, lowering the annualized figure to 2.8%.
Thus, core inflation remains comfortably within the Reserve Bank of Australia's (RBA) target range, although risks are slightly tilted to the upside.

US GDP Growth Outlook

Forecasts for the preliminary US GDP (quarterly) point to a sharp slowdown to 0.4%, down from 2.4% in the previous quarter.

After a period of robust growth, mainly driven by strong consumer spending, the economy now shows signs of significant cooling — with some estimates putting first-quarter 2025 annualized growth at just 0.1%.

A surge in imports ahead of expected tariff hikes could weigh heavily on GDP, while inventory build-ups might offer a slight offset.
Consumer spending was weak early in the year but recovered in March, supported by better weather and purchases pulled forward due to anticipated price increases.

Business investment shows early signs of recovery, mainly driven by aircraft orders, while overall equipment investment remains sluggish.
Housing activity is expected to remain subdued amid high home prices and elevated inventories, according to analysts.

Bank of Japan Monetary Policy Outlook

The BoJ is widely expected to keep its policy rate unchanged at 0.50%.
Policymakers are likely to adopt a cautious “wait and see” approach, balancing solid domestic consumption and inflation above 2% against external risks such as US trade policy uncertainty and yen strength.

Special attention will be on the BoJ’s updated economic forecasts, especially any changes to inflation and growth projections.
A further rate hike later this year remains a possibility.

US Manufacturing Sector Development

The ISM Manufacturing PMI is expected to fall from 49.0 to 48.0, staying firmly in contraction territory.

The US manufacturing sector continues to suffer from high interest rates, weak demand, and renewed tariff fears.
Regional Fed surveys suggest weaker new orders and rising input costs, particularly for imported goods like steel and aluminum.
As a result, investments and hiring in the manufacturing sector are expected to remain subdued.

US Labor Market Outlook

Average hourly earnings (MoM) are expected to rise by +0.3%, unchanged from the previous month.
Nonfarm payrolls are projected to show 129,000 new jobs, down from 228,000 in the previous month.
The unemployment rate is expected to remain stable at 4.2%.

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While the labor market momentum is slowing, large-scale layoffs have not materialized yet, supporting the overall unemployment rate.
The slowdown is mainly due to uncertainty stemming from changes in trade policy and frozen federal funding, which are dampening companies’ willingness to hire.