This week US macro data is employment data centric with April NFP on 2nd May, JOLTS on 29th April & Employment Cost Index on 30th April. NFP itself we believe is likely at 120k with unemployment rate at 4.2% and monthly average hourly earnings at 0.3% MoM. We also have the core PCE data for March which is likely to come soft at .08% MoM. The Q1CY25 GDP estimate is likely at 0.4% QoQ SAAR. ISM manufacturing due on 1st May is likely to come weak at 48.4. Even the consumer confidence is likely to come weak at 87 levels. In summary while soft data continues to worsen, the hard data has still some time before it turns south. We continue to believe in total 75 bps cut in REMCY25 by Fed. In Fed speak, Fed speakers entered the May FOMC blackout period starting 27th April. On tariff front, the Trump administration continued to signal de-escalation on tariffs past week. Considering the recent softening of its stance on automakers, the Trump administration might postpone 25% tariffs on automakers starting 3rd May. In RoW events, Canada sees it's elections on 28th April where PM Mark Carney is likely to win. In Eurozone, the inflation data is likely to remain soft and GDP data likely lower in Q1 2025 at 0.1% q-o-q, from 0.2% in Q4 2024. We now expect the ECB to cut the depo rate to 1.50% by September 2025 (currently at 2.25%). Eurozone survey data continues to remain weak and the recent ECB meet was outright dovish. BOJ in it's 1st May meeting is likely to remain on status quo because there are too many uncertainties, especially relating to the US tariff policies. Economic data and political climate justify an early BoJ rate hike, but significant uncertainty is hindering it. We expect the next hike in the July BOJ meeting. We also maintain our forecast that rates will be raised every six months thereafter, reaching 1.25% in July 2026.
