• MON: Riksbank Minutes; Norwegian CPI; EZ Sentix Index.
• TUE: BoJ SOO, CBRT Minutes, EIA STEO & OPEC MOMR; Chinese Inflation; German ZEW Survey, Australian Budget. 
• WED: IEA MOMR; UK GDP; US CPI. 
• THU: Banxico Rate Decision; India Holiday, Swiss Holiday. 
• FRI: ECB Minutes, BoC Senior Loan Officer Survey; US Retail Sales; University of Michigan Survey.

NOTE: Previews are listed in day-order

RIKSBANK MINUTES (MON): The minutes of the April gathering (which saw main policy parameters unchanged) will be scrutinised for any discussion around a potential alteration to the repo path. In light of some unrealised calls going into the April decision for a near-term dovish tweak given the lack of inflationary pressures with SEB, at the time, ascribing an outside chance to this being accompanied by a long-term hawkish alteration as the outlook more broadly continues to improve. While this alteration did not take place, the current domestic situation does given some credence to such a tweak and as such could have been a discussion point at the gathering. For reference, the Riksbank continues to reiterate that it is entirely possible to cut the repo rate but recent minutes have noted that the ‘threshold for a rate cut at a later date is considered to be fairly high’.

AUSTRALIAN BUDGET (TUE): The budget will be unveiled on May 11th at 5:30EDT/ 10:30BST/ 19:30AEST. Desks expect the faster-than-expected economic recovery and rise in commodity prices to be portrayed by a lower-than-forecast 2020/21 deficit, which was set at AUD 197.7bln in December in the Mid-year Economic and Fiscal Outlook (MYEFO). The 2021/22 deficit is also seen below the MYEFO. Australia already emphasised its policy approach whereby the Treasurer said the aim is to attain an unemployment rate of 4.5% (5.6% in Mar) before addressing the fiscal repairs. The closely eyed report from Deloitte Access Economics has found that a recovery in the jobs market, higher iron ore prices, and strong consumer spending will turn around fortunes for the Aussie budget, whilst Westpac sees the deficit revised lower to AUD 155bln. That being said, it's worth keeping in mind the deteriorating relations between Australia and China, with the latter 'indefinitely' suspending key economic dialogue with Australia.

BOJ SUMMARY OF OPINIONS (TUE): The BoJ will release the Summary of Opinions from its April meeting which was an uneventful affair where the BoJ left policy settings unchanged as expected with rates kept at -0.10% and QQE with YCC maintained to target 10yr JGB yields at 0.0%. The BoJ stuck to a cautious tone in its statement in which it reiterated the view that Japan's economy is likely to improve as a trend although the pace of the rebound is to remain moderate and noted large uncertainties on the outlook, as well as regarding the consequences of COVID-19. Furthermore, it stated that risks to the economic outlook are currently skewed to the downside with risks being larger for the price outlook although suggested optimism on exports and output which continued to increase and noted that capex is showing some weakness but is picking up. The BoJ also released its latest Outlook Report which was mixed as the central bank lowered its Core CPI forecasts for the current fiscal year as flagged beforehand by source reports and which wasn't much of a surprise given that the latest inflation data remained in negative territory, while it upgraded its GDP growth forecasts through to fiscal 2022.

CHINESE INFLATION (TUE): CPI Y/Y is seen ticking higher to 1.0% in April from 0.4% March, whilst the M/M metric is forecast at -0.2% from the -0.5% prior. April PPI is seen jumping to 6.6% from the prior 4.4%. Desks suggest that this time around, the PPI metric may attract more attention given the recent rise in commodity prices and could contribute to inflationary concerns from this front. The PMI releases in the West have largely highlighted the price pressures the manufacturing sector has been facing, whilst base metal prices continue to remain elevated as traders cite heightened Chinese demand for iron and copper. Goldman Sachs sees the CPI Y/Y metric at 0.9%, with food inflation likely to have moderated in April as pork, vegetable, and fruit prices declined.

UK GDP (WED): The prelim release of Q1 GDP is forecast to reveal a contraction of -1.8% vs. the 1.3% expansion seen in Q4 2020. The UK economy spent a majority of the quarter in lockdown and therefore a shrinking of the economy is almost an inevitability. However, the adaptivity of the economy and businesses will ensure that the contraction is more shallow than the one seen during the initial lockdown in the UK back in March 2020. This analysis has largely been observed in the already-released monthly data for January and February which came in at -2.2% M/M and +0.4% M/M respectively. That said, given the recent reopening of the UK economy, Q1 data will largely be regarded as somewhat in the "rear-mirror" with market participants expressing more of a preference towards  timelier indicators in order to assess the momentum of the UK economy as activity resumes.

US CPI (WED): Headline CPI is seen rising +0.2% M/M in April (prev. +0.6%) with the Y/Y rate seen climbing to 3.6% Y/Y from 2.6%. The Core rate is seen rising +0.3% M/M, lifting the annual rate to 2.3% Y/Y from 1.6%. Officials have frequently said in recent months that inflation pressures in Q2 are likely to result in breaches of its inflation target, though are likely to be transitory in nature. The upside is a result of pandemic base effects, rise in commodity prices, and pent-up demand being released as pandemic restrictions are lifted. Next week's data will likely nod to all of these themes. It will not be until later in the year when markets (and officials) will truly be able to state with confidence whether the inflationary pressures were indeed transient; both fiscal and monetary officials in the US have warned, however, that if inflation does prove to be more sticky, they have the tools to cope. The inflation data will also take a political spin too: many passed and current officials have expressed concerns about inflation, and this is influencing discussions on further fiscal spending, so be cautious about the data being used as a political football.

BANXICO PREVIEW (THU): Banxico previously left rates at 4.0% in a unanimous decision, noting that the recent inflation pick-up was higher than it projected in its QIR, and argued that the backdrop was highly uncertain, which presents risks to inflation, activity and financial conditions, challenging monetary authorities. It said it would be taking a data-dependent approach; Credit Suisse expects that it will leave rates unchanged at the May meeting.

ECB MINUTES (FRI): As expected, the ECB refrained from tweaking policy settings with rates and asset purchases left at current levels. In the accompanying policy statement, the ECB reiterated its pledge that “purchases under the PEPP over the current quarter to continue to be conducted at a significantly higher pace than during the first months of the year”. At the follow-up press conference, President Lagarde took a balanced view of the economy by noting that “the risks surrounding the euro area growth outlook over the medium term have become more balanced, although downside risks remain in the near term”. Note, this was a reiteration from the March meeting and therefore there doesn’t appear to have been much of an alteration in the Governing Council’s outlook for the Eurozone despite an increasingly successful vaccine campaign. In part, this was likely a by-product of wanting to wait for the June meeting which will be accompanied by the latest round of staff economic projections, whilst at the same time not wanting to provide much ammunition for the hawks at the Bank. Comments ahead of the meeting from Netherland’s Knot who suggested the ECB could begin phasing out PEPP as of Q3 and conclude purchases in March 2022 presented a line of enquiry to journalists. However, Lagarde was resolute that at this time any discussion of tapering would be premature and the Governing Council did not consider a reduction in the pace of PEPP purchases. This was later echoed by source reports after the meeting and as such, is expected to be reflected in the upcoming account of the meeting. Furthermore, Lagarde stated that the ECB has significantly raised the level of its purchases and will continue to do so.

US RETAIL SALES (FRI): Analysts expect April's retail sales data will see a +0.2% M/M rise (from the prior +9.8%), the ex-autos measure is seen rising +0.8% M/M (from +8.4%). Given that the March data was underpinned by a fresh round of stimulus checks, the cooling in retail sales is understandable. The key debate ahead is how sustainable the consumer impulse will be: will consumers have front-loaded spending, and turn more cautious, or will they continue spending as restrictions are lifted. Some analysts have been making the case that the rounds of stimulus checks, pent-up savings, and a normalisation of economic conditions will result in consumption picking up. RBC's analysts say that as the re-opening continues, it can see in the weekly credit card data that many of the sales sub-categories continue to push higher, and this dynamic is likely to support the 'retail control' measure (RBC sees +1.4% in April); the bank says Q2 consumer spending appears to be starting out on a strong footing.