Week ahead: Eurozone inflation, Apple and Meta earnings in focus
ADVERTISEMENT
Global markets rebounded last week on a broad-based rally amid signs of de-escalation in the US-China trade war. Investors will continue to monitor major economic data this week, including the eurozone's monthly inflation figures and the United States' jobs report.
Additionally, major US technology companies, including Meta, Microsoft, Amazon, and Apple, are set to report their quarterly earnings. The market will particularly focus on Apple, as the company may face challenges stemming from the trade war.
What to watch in Europe
The eurozone is scheduled to release its flash Consumer Price Index (CPI) for April this Friday. Annual inflation in the Eurozone fell to 2.2% in March, easing from 2.3% in the previous month and marking the lowest level since November 2024. Core inflation, which excludes energy, food, alcohol, and tobacco, also cooled to 2.4% from 2.6% in February, the slowest pace since October 2021. Consumer prices declined across most major European economies, including Germany, Spain, the Netherlands, and Belgium. However, inflation remained steady in France and accelerated in Italy in March. Major economies, including Spain, Germany, France, and Italy, will also release preliminary inflation and Gross Domestic Product (GDP) figures for the first quarter. The GDP growth data will be critical for gauging the eurozone's economic trajectory.
Consensus suggests that eurozone inflation may continue retreating to 2.1% in April, although core CPI is expected to rise slightly to 2.5%. Nonetheless, consumer prices appear on track to return to the European Central Bank (ECB)'s 2% target.
ECB President Christine Lagarde recently stated that the disinflation process in the eurozone is nearly complete and the bank will continue its 'data-dependent' approach regarding interest rate decisions. However, US tariffs have deteriorated the region's economic outlook, requiring the ECB to adopt a more accommodative monetary policy stance. Officials at the International Monetary Fund (IMF) noted last week that the negative impact of US tariffs on the eurozone's economic outlook is more significant than the positive effect of the bloc's fiscal reforms.
The ECB has cut interest rates seven times since June last year, bringing the key deposit rate down to 2.25%. Analysts expect the bank to reduce the rate once more in June and maintain it at 2% for the remainder of the year.
Related
ECB's Lagarde: Trade tariffs are a negative shock for the eurozone
What to watch in the United States
In the US, first-quarter GDP figures and April's non-farm payrolls will be the focal points for financial markets. The American economy added 228,000 jobs in March, far exceeding expectations, although the unemployment rate rose to 4.2% from 4.1% due to a higher participation rate. Stronger-than-expected job growth eased concerns that the US was falling into recession earlier in April. However, with tariffs now taking effect—albeit at a lower rate for most countries—the economic impact could become more pronounced, making the latest job data critical for market sentiment. Consensus estimates suggest 129,000 jobs were added to the labour force in April, with the unemployment rate expected to remain at 4.2%.
The US will also release its advance GDP estimate for the first quarter, with economists forecasting a sharp slowdown as tariff-driven economic uncertainty bites. Expectations are for the economy to have grown by only 0.3%, compared with 2.4% in the final quarter of last year. Furthermore, the US Personal Consumption Expenditure (PCE) data, the Federal Reserve's preferred measure of inflation, will also be closely watched.
As for Apple's fiscal second-quarter earnings, the company is expected to report 4% year-on-year revenue growth and a 5% annual increase in earnings. Sales may have been bolstered ahead of tariffs taking effect, especially as Trump exempted electronic products from the 125% tariffs on China. However, Apple still faces 20% import duties on goods manufactured in China, where it produces most of its products. The company reportedly plans to shift all US-sold iPhone production to India by the end of 2026.
Related
Apple plans to switch US iPhone assembly to India in blow to China
What to watch in the Asia-Pacific region
In the Asia-Pacific region, attention will centre on the Bank of Japan's (BOJ) rate decision this week. The BOJ is expected to keep interest rates steady amid mounting economic concerns linked to US tariffs. Governor Kazuo Ueda stated last week that the bank would continue raising rates if underlying inflation moves towards its 2% target. However, he noted that tariffs would likely impact the stability of consumer prices and weigh on economic growth.
Elsewhere, investors will closely watch China's manufacturing and services Purchasing Managers' Indices (PMIs) for April and Australia's first-quarter CPI, both due for release on Wednesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
LeMonde
19 minutes ago
- LeMonde
Hopes fade for Polish engagement on the European stage
A year and a half ago, Donald Tusk's appointment as head of the Polish government was widely welcomed across Europe. From Paris to Berlin, Madrid to Brussels, political leaders hailed the defeat of the right-wing Law and Justice (PiS) party and heralded Warsaw's big comeback to the European stage. The victory of the nationalist, eurosceptic and pro-Trump candidate Karol Nawrocki in Poland's presidential election on June 1 dealt a blow to those aspirations, not least due to the major geopolitical challenges the European Union currently faces, from the war in Ukraine to Donald Trump's return to the White House in the United States. I am skeptical. Nawrocki succeeds Andrzej Duda, another PiS member who, over the previous 18 months, used his veto and executive powers to block Tusk from delivering on pledges for progressive reforms to abortion access, LGBTQ+ rights, judicial independence and, more broadly, strengthening the rule of law. Like his predecessor, Nawrocki was expected to continue blocking such EU-favored liberal reforms. However, "His political views are much more radical than Duda's, which foreshadows a much more difficult coexistence with the Tusk government," said Piotr Buras of the European Council on Foreign Relations (ECFR) think tank.
Fashion Network
an hour ago
- Fashion Network
Beyoncé-worn fashion upstart Farm Rio raises prices, slows exports to US
A Brazilian fashion company known for colorful prints sported by celebrities, including Justin Bieber and Beyoncé, is selectively raising prices to cushion the impact of tariffs while scaling back exports to the US. Azzas 2154 SA, owner of the Farm Rio brand, has already increased some prices in the US and is considering shifting parts of its production to Europe from China, chief executive officer Alexandre Birman said during an interview at Bloomberg's headquarters in New York. 'We don't know where tariffs will stop, but we've temporarily slowed US-bound imports,' Birman said. Azzas, one of Brazil's largest apparel exporters, is navigating turbulence in both the US and its home market, where high interest rates have fueled concerns about demand. Globally, sales for mid-tier fashion-focused brands have largely held up, but companies have warned that the outlook for the second half is unclear. Brazil's apparel sales have remained strong so far this year, but higher tariffs could hinder Azzas' international expansion. Still, Birman sees opportunity in Brazilian footwear manufacturing as companies seek alternative sourcing countries to avoid US duties. 'If tariffs on Chinese goods rise above 50%, we become competitive,' he said. 'In that case, we'd need to accelerate investments to expand local output, as China's production quality has improved significantly in recent years.' The US hiked tariffs to as high as 145% before scaling back to 30% for 90 days as the countries worked toward an agreement. US President Donald Trump has also raised tariffs for countries across the board and threatened the EU with a levy of 50% if no deal is reached. US states and small businesses are challenging the levies at the US Court of International Trade, which had previously ruled against the tariffs. Although a federal appeals court has temporarily allowed them to remain in effect, the future of US trade policy will depend on a mix of court decisions and ongoing negotiations with foreign governments. In subsequent comments to Bloomberg, Birman said that Trump's policies are causing uncertainty. If duties continue to rise, Azzas may move apparel production to Turkey or Portugal — a shift that would also support the European rollout of its Farm Rio brand. The company currently has a limited number of stores in the region. It's also looking to expand in the Middle East, Mexico and South America. The Farm Rio brand has six stores in the US and more than 100 in Brazil. Birman said that Azzas, formed from the 2024 merger of Arezzo and Grupo Soma, has seen only a 'small impact' from tariffs so far. The Belo Horizonte, Brazil-based company is focused on accelerating synergies and improving its cash flow as it merges operations. He added that the group is streamlining operations with an eye on return on invested capital and hasn't ruled out deals related to its brands. The company also owns high-income brands including Animale, Maria Filó, Cris Barros and Fábula, among others. Birman also has a brand under his own name that sells shoes costing from $400 to $1,000. Actress Emily Blunt wore the shoes during the 2023 Oscars. Quarterly results Birman said the integration is starting to deliver results, with gains expected as the company streamlines logistics and shipping operations and combines areas such as e-commerce and customer service. Revenue rose sharply in the first quarter compared to a year earlier. Investors are watching closely for signs of progress. Ruben Couto, an analyst at Banco Santander, said in a recent note to clients that the company's negative operational cash flow and high capital expenditures contributed to higher debt last quarter. To counter this and instill financial discipline, employee bonuses are now tied to Azzas' free cash flow, Birman said. Management also plans to lower capital expenditures by 120 million reais ($21 million) next year by reducing spending on technology and opening new stores via franchisees. Birman downplayed a report from Valor Econômico, a Brazilian newspaper, that there's tension with Grupo Soma founder Roberto Jatahy. 'There are points of divergence that generate interesting debates,' Birman said of his relationship with Jatahy. He added that 'everything is governed by a valid agreement, including a 10-year lock-up plan, to uphold its terms.' Last year, the company's major shareholders agreed to a lock-up plan that restricts the sale of their stakes except in specific cases. Birman and Jatahy are major shareholders in the combined entity, and Soma generates about 30% of the revenue. Azzas' Brazil-listed stock has advanced more than 50% so far this year, with much of the jump following the company's first-quarter earnings release last month. Birman added he has a 'deep' relationship with Farm Rio's founders, Katia Barros and Marcello Bastos. 'We have a fashion connection; there's a constructive relationship with strategy to improve the business,' he said.
France 24
an hour ago
- France 24
Irish university to cut links with Israel over Gaza war
The university's board informed students by email that it had accepted the recommendations of a taskforce to sever "institutional links with the State of Israel, Israeli universities and companies headquartered in Israel". The recommendations would be "enacted for the duration of the ongoing violations of international and humanitarian law", said the email sent by the board's chairman Paul Farrell, and seen by AFP. The taskforce was set up after part of the university's campus in central Dublin was blockaded by students for five days last year in protest at Israel's actions in Gaza. Among the taskforce's recommendations approved by the board were pledges to divest "from all companies headquartered in Israel" and to "enter into no future supply contracts with Israeli firms" and "no new commercial relationships with Israeli entities". The university also said that it would "enter into no further mobility agreements with Israeli universities". Trinity has two current Erasmus+ exchange agreements with Israeli universities: Bar Ilan University, an agreement that ends in July 2026, and the Hebrew University of Jerusalem, which ends in July 2025, the university told AFP in an email. The board also said that the university "should not submit for approval or agree to participate in any new institutional research agreements involving Israeli participation". It "should seek to align itself with like-minded universities and bodies in an effort to influence EU policy concerning Israel's participation in such collaborations," it added. Ireland has been among the most outspoken critics of Israel's response to the October 7, 2023 attacks on southern Israel by Hamas militants that sparked the war in Gaza. Polls since the start of the war have shown overwhelming pro-Palestinian sympathy in Ireland. In May 2024, Dublin joined several other European countries in recognising Palestine as a "sovereign and independent state". It then joined South Africa in bringing a case before the International Court of Justice in The Hague accusing Israel of committing genocide in Gaza -- charges angrily denied by Israeli leaders. In December, Israel's Foreign Minister Gideon Saar ordered the closure of the country's embassy in Dublin, blaming Ireland's "extreme anti-Israel policies". The University of Geneva also announced Wednesday that it has ended its partnership with the Hebrew University of Jerusalem following student protests, saying it no longer reflected the institution's "strategic priorities".
