This week is pivotal for markets as the US prepares to announce its reciprocal tariffs plan. Key economic data will be released, starting with German CPI on Monday.
On Tuesday, the RBA is expected to maintain its Cash Rate at 4.10%. The Eurozone CPI is forecast at 2.3%, while the US ISM Manufacturing PMI is projected to decline to 49.5. Job Openings are anticipated at 7.632 million.
Midweek Data And Tariffs
Wednesday will feature US ADP figures at 105,000 and the introduction of reciprocal tariffs, which may impact market movements.
Thursday’s indicators include Switzerland CPI forecasts of 0.5%, while Initial Jobless Claims are expected at 225,000. The US ISM Services PMI is anticipated at 53.0.
Friday’s Canadian Employment report is expected to show 12,000 jobs added, with the US NFP anticipated at 140,000. The unemployment rate is projected to remain stable at 4.1%.
At the start of the week, inflation readings from Germany will serve as a bellwether for broader European pricing trends. Any deviation from anticipated levels could alter expectations for policy moves later this year. It’s worth staying attentive to how rate-sensitive instruments respond, particularly contracts with expiry over the next two quarters.
Australian Policy And Global Reactions
Tuesday brings Australian monetary policy into focus. With no change forecast, the attention shifts toward the accompanying statement. These remarks tend to influence not only rate expectations at home but also cross-currency volatility, primarily against the US dollar and regional benchmarks. We’d watch closely for shifts in short-dated volatility pricing.
As we move to the middle of the week, US ISM Manufacturing data and job openings provide a real-time view of business sentiment and labour market tightness. Should the ISM figure underperform as expected, pressure on US yields may mount, impacting relative value trades between US and European sovereigns. Lower job openings could amplify this trend, particularly if we do not observe compensatory strength in wages or hours worked later in the week.
The headline for Wednesday is undoubtedly the long-awaited tariff announcement. While the rhetoric has been widely telegraphed, the fine print will dictate the scope and severity of market response. We may see heightened realised volatility around the release. That could create short-term dislocations worth exploiting, especially if options premiums widen disproportionately to directional risk. For short-term traders, it’s prudent to have scenario trees ready, not assumptions.
ADP employment figures, although not always a perfect predictor of Friday’s official numbers, hold weight under current conditions where labour market resilience is being carefully reevaluated. Should it come below forecast, we might see repricing of labour-linked instruments, including sectors exposed to wage sensitivity in equity vol markets.
Thursday’s inflation figures from Switzerland rarely shake broader markets, but they might attract attention this time if they challenge the perceived stability of central European price growth. Meanwhile, US jobless claims and services PMI will test the narrative of a soft-landing economy. If services exhibit strength while jobless claims tick up, we’d expect some flattening in the front-end, given rising uncertainty about consumer durables and credit risk.
By the time we reach Friday, most focus will be on the labour market data from both the US and Canada. Given recent debates surrounding policy lags and the durability of economic momentum, NFPs are likely to carry meaningful directional risk. Any surprise—positive or negative—is likely to reverberate across short-maturity rate futures and FX vol curves. Market pricing has not been aggressive, so even a moderate upside or downside could offer good asymmetry, particularly in directional bias strategies or gamma scalping.
Unemployment holding steady is likely to confirm current market pricing, but any upward drift—even slight—could pressure expectations for the next quarter, opening up room for reallocation among rate-sensitive instruments.
We would position to act rather than to predict. There’s enough incoming information to skew expectations, and being nimble this week isn’t optional—it’s foundational.
