April 28, 2025

“There is a flood data for markets to digest this week, with GDP growth in the US and the eurozone as well as the April non-farm payrolls report. For once there were no big headlines from the Trump administration over the weekend, but they will keep flowing over the coming months.”

Tim Hallinan – Trading Director

USD

Undoubtedly there will be a continued flow of tariff-related and geopolitical headlines to keep traders on their toes throughout the week, but the focus right now is on their real economic impact as markets look towards data on job openings, consumer confidence, Q1 GDP growth, core PCE inflation, and the April non-farm payrolls report. The GDP data is particularly uncertain this time around, because economists are not quite sure on the total impact of import front-running ahead of Trump’s tariffs – imports are a negative to the GDP calculation. The consensus is 0.4%, but there is a wide spread around that within the survey and the Atlanta Fed’s GDPNow model estimate sits at -2.5%. The key for markets will be trends in investment and consumption – they will want to know whether the slump in confidence in the soft data is passing through into economic decisions. The JOLTS survey and the April jobs figure will be key for the Fed rate path, too, as it was concerns about runaway unemployment that triggered the first 50bp move.

GBP

The data diary for sterling is relatively light this week, so it will mostly be external developments in charge. The impact of the domestic data has been largely muted and it is the extra nervousness since ‘liberation day’ and perceptions of relative risk across different currencies that have dominated. Weaker sentiment has tended to mean higher GBP/USD and weaker GBP/EUR. There are lingering concerns about the Treasury being backed into a corner by higher yields and weaker growth, which present some downside risks if the gilt market sees some more outflows.

EUR

The main news for the euro this morning comes from a Reuters sources story suggesting that a solid consensus on another ECB rate cut has been forming for June. The market had begun to fully price that outcome on Friday as policymakers were floating the idea of a 50bp move, though this morning’s report said there was little appetite for that. Rates are expected at 1.50% by the end of the year. The key data this week is on Q1 GDP and April CPI inflation. Q1 was likely to be another story of stagnation at 0.2% growth, and CPI is expected to inch lower again to 2.1%

Markets

Equities ended broadly higher on Friday as the market calmed. This week is critical for earnings, with more than 40% of the S&P 500 reporting results, including Apple, Microsoft, Amazon, and Meta.

Main Economic Events (All Times CET)

8:00am: Norway Unemployment Rate
Canadian Election

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