The week is defined by inflation data from the US and Germany, alongside with the UK growth figures. Markets will focus on whether inflation continues to reaccelerate due to the elevated energy prices, reinforcing central banks caution. This reinforces the global “higher for longer” narrative, with delayed easing cycles across major economies. Making this item consistent across all three releases.
EUR: Germany CPI (YoY)
May 12, 09:00 MT time
Forecast: 3.0% vs Previous 2.9%
Germany’s inflation is expected to tick slightly higher, reflecting persistent energy pass-through from elevated oil prices and delayed effects of supply disruptions. While prior prints showed stabilization near the target, this uptick suggests inflation is not fully contained. For the European Central Bank, this complicates easing plans. A higher print reinforces caution, delaying rate cuts and supporting the euro in the short term, though growth concerns still limit upside.
Affected instruments: EURUSD, EURGBP, EURJPY, and other EUR-pairs
USD: US CPI (YoY)
May 12, 15:30 MT time
Forecast: 3.6% vs Previous 3.3%
The US inflation is expected to edge higher, driven by energy and services. The previous 3.3% already signalled sticky inflation, and a move toward 3.6% confirms that the disinflation has stalled. For the Federal Reserve, this strengthens the “higher for longer” stance, especially with no May meeting and June cuts priced at 0%. Markets will interpret this as a signal that policy easing is delayed further, supporting the dollar and capping risk assets.
Affected instruments: EURUSD, GBPUSD, USDCAD, and other USD-pairs
GBP: UK GDP (YoY)
May 14, 09:00 MT time
Forecast: 1.4% vs Previous 1.0%
The UK growth is expected to improve modestly, reflecting resilience in services and stabilization after prior weakness. The previous 1.0% print pointed to stagnation, while 1.4% suggests slow recovery rather than contraction. For the Bank of England, this reduces urgency for rate cuts, especially alongside the elevated inflation. A stronger GDP print could support the sterling, though an upside remains limited by global uncertainty and tight financial conditions.
Affected instruments: EURGBP, GBPUSD, GBPJPY, and other GBP-pairs