This week, the US will report inflation data that will be eagerly monitored by investors as they analyse whether the Fed may suspend rate rises next month.

Inflation Data

The United States will disclose April inflation statistics on Wednesday, with experts anticipating the core CPI, excluding volatile food and fuel costs, to rise 5.5% year on year, up from 5.6% in March. The annual headline rate of inflation is predicted to rise by 5%.

The Fed of the United States raised interest rates for the ninth time in a row last week, as predicted, but hinted that it may stop its aggressive tightening drive at its next meeting in June.

A lower-than-expected figure would boost expectations for a Fed rate drop later this year, while a higher-than-expected reading would strengthen the argument for the Fed to keep rates higher for longer.

The employment data for April, released on Friday, revealed that job growth and salary rises were strong, casting doubt on the probability of a recession. In addition to the CPI figures, the economic calendar includes the producer price index on Thursday, as well as weekly information on jobless claims.

Bank of England

As part of its ongoing war against inflation, the BoE is likely to hike interest rates by another quarter point on Thursday.

Inflation in the United Kingdom is running at 10.1%, far higher than in the Eurozone, worsened by rising food prices and labour shortages connected to Brexit, which are keeping salaries high.

The mix of rising inflation and a tight labour market is feeding betting for more rate rises this year, so the central bank's revised growth and inflation estimates will be eagerly monitored.

The day after the BOE decision, the United Kingdom will issue first-quarter GDP statistics, which is likely to show that growth remained dull in the first three months of the year.

Crude Oil

The price of oil rose on Friday but fell for the third week in a row due to ongoing concerns about demand.

Benchmark Brent closed the week down approximately 5%, while crude oil fell 7%, despite a Friday bounce. For the first time since November, both criteria fell for three weeks in a row.

Prices rose after Friday's strong job data in the United States allayed fears of an economic slump.

Analysts at Commerzbank believe that fears about oil consumption are exaggerated and that prices will rise in the coming weeks.

(investing.com, reuters.com)