China will release April trade data on Saturday, with the surplus expected to widen to about CNY 570 billion from CNY 354.75 billion and to about USD 82.4 billion from USD 51.13 billion. According to reports from Investing.com India, ING expects exports to rise about 6.5% year-over-year and imports to jump about 20.4%, reflecting strong domestic restocking and higher commodity and energy costs. The key focus will be whether elevated energy prices are inflating import values and compressing underlying trade surplus dynamics. China's April CPI and PPI data are expected to show easing headline inflation, with CPI forecast at about 0.8-1.0% year-over-year versus 1.0% previously as post-Lunar New Year demand fades.
US CPI is expected to rise by 0.6% month-over-month in April (previous 0.9%), while the core rate is seen rising 0.4% month-over-month (previous 0.2%). As reported by Investing.com India, PPI is expected to rise by 0.4% month-over-month (cooling from the previous 0.5%). The Cleveland Fed's inflation nowcast gauge is tracking April CPI at 0.45% month-over-month, versus 0.42% in March, and the core rate at 0.21%, unchanged from March. Annual rates are tracking at 3.56% year-over-year in April and the core rate at 2.56% year-over-year. The data follows a hot March CPI report, which showed a pickup in consumer prices, with the annual rate rising to its highest since May 2024 at 3.3% year-over-year.
The ongoing Iran war, which began in late February with U.S.-Israeli strikes, continues to significantly impact global markets and energy prices. Energy prices have soared with U.S. crude up more than 60% for the year, while the national average price for gasoline topped $4.50 per gallon for the first time since July 2022. According to The Economic Times, investors are eager to see a reopening of the Strait of Hormuz, a critical choke point for global oil supplies. "The continued progress towards a resolution for the U.S.-Iran war will be top of mind for investors," said Michael Arone, chief investment strategist at State Street Investment Management. "You need to begin to see ship movements in the Strait of Hormuz." The war is also expected to be a topic when U.S. President Donald Trump meets with Chinese President Xi Jinping in Beijing late next week.
The previous retail sales report for March showed a 1.7% month-over-month rise, driven by gasoline, while core sales printed at 1.9% month-over-month. As reported by Investing.com India, the Chicago Fed's CARTS advance retail trade update suggests ex-autos retail sales will rise 1.1% month-over-month in April (versus prior 0.6%), and 0.3% month-over-month when adjusted for inflation. Continuum Economics expects headline retail sales to rise 0.7% month-over-month, with ex-autos up 0.9% month-over-month and ex-autos/gas up 0.5%. Gasoline prices increased further in April, with the average price rising above $4.50 per gallon for the first time since July 2022, though at an easier pace than in March. Auto sales appear to have seen a modest recent decline.
US stock markets have shown exceptional performance with the S&P 500 rising more than 16% from its year-to-date low recorded at the end of March, and the Nasdaq Composite reaching roughly 11% year-to-date gains. According to The Economic Times, the strongest U.S. quarterly earnings season in more than four years has lifted sentiment, with the S&P 500 up 8% for 2026 as of Thursday and the technology-heavy Nasdaq Composite up 13% on the year. LSEG IBES projects S&P 500 earnings this quarter could rise by about 28.6%, reflecting significant outlays by companies on artificial intelligence and related infrastructure projects. Upcoming earnings include Cisco and Applied Materials reporting next week, with Nvidia and Walmart following in coming weeks. "Earnings are the lifeblood of this rally," said Michael Arone, chief investment strategist at State Street Investment Management, noting that "all the fears that tariffs or this oil price shock would eat into margins have not materialized so far."
