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Labour market data, inflation, and politics in focus

  • Tuesday – With UK wage growth persistently higher than inflation, does it warrant an argument for a Bank of England (BoE) rate hike? 
  • Wednesday – Eurozone employment is expected to continue rising, a further vindication of the European Central Bank’s (ECB) monetary policy stance.
  • Thursday - US Building Permits for April provide a forward-looking indicator of economic confidence, although deteriorating global trade conditions could diminish the print’s influence.



The week is set to start with a sparse economic calendar. US Consumer Inflation Expectations for April is probably the only stand-out and is expected to hold steady. Consumer confidence is an important criterion for monetary policy, so an undershoot has the potential to undermine expectations.


The Federal Reserve has held fast to its independence and ignored Donald Trump’s suggestion of a 1.0% cut in borrowing costs. In the end, the meeting resulted in little besides a technical adjustment to the rate of interest paid to banks on excess reserve capital. The US Dollar found some strength as a result, but upside has been limited given that a China trade deal is expected to be finalised as soon as next week.


Today, German Q1 Gross Domestic Product (GDP) is expected to show Europe’s economic powerhouse has just avoided recession. A Q3 reading of -0.2% was followed by a Q4 print of 0.0%, so a move back into positive territory supports the theory that the Eurozone has bottomed and may be turning a corner.

Eurozone employment data for the first quarter will be released today. The European Central Bank hopes that accumulating employment would drive the inflation forecast higher. A forecast expansion of 0.4%, up from 0.3% in the final quarter of 2018, would help establish a more robust foundation for the H2 2019 growth picture.

Month-on-month US Advance Retail Sales is set to tumble back into negative territory today. Following March’s 1.6% expansion, the highest in 18 months, a print of just 0.2% is expected for April. It is worth noting that monthly data is notoriously noisy, and the annual number is still ticking upwards. 


US Building Permits for April will be published. Forecasts suggest this figure could break above the 1.3 million level for the first time since January, which would help cement a stronger domestic picture to balance out the persistently tumultuous US-China trade negotiations.

Eurozone Finance Ministers meet in Brussels ahead of both the imminent European Parliamentary Elections. The talking points are numerous, but one worth noting is a discussion of new ECB President candidates.


Eurozone Consumer Price Index inflation for April is set for release. Having spent much of 2018 above target, the reading has been below the 2.0% inflation benchmark since last November. After March’s figure of 1.4%, 1.7% is forecast for April which paints an increasing inflation picture.