3 Key Economic Events That Could Affect Your Portfolio This Week

Key Points

• Chinese data is the highlight at the start of the week

• UK inflation figures will be crucial to Bank of England outlook

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Stock markets on both sides of the Atlantic have bounced back from the April lows. With the immediate threat of tariffs receding, the focus swings back to economic data. These are three key economic events that could impact your portfolio. 

China Industrial Production

Figures for China’s industrial production and retail sales will be released on Monday during the overnight Asian session. In March, industrial production rose 7.7%, the strongest pace of expansion since June 2021. The data for April will be heavily laced with tariff risks but the data will be important for setting the tone for risk assets broadly at the start of the week. It could have a direct impact on some stocks, particularly a number of industrial names in Europe and basic resources (oil, miners) in the UK, including BP, Shell, Anglo American, Glencore, Antofagasta, Rio Tinto and others.

Retail Sales Figures

Retail sales data will also be released at the same time – last month it hit 5.9%, ahead of forecasts as efforts to boost Chinese consumer spending seem to be paying off. This could impact the likes of JD.com, Alibaba, Tencent, PDD and others in the China tech and retail space, which have recently reported earnings.

UK CPI Inflation

Britain’s latest CPI inflation report will be released on Wednesday and will likely further shape expectations for what the Bank of England is going to do next. Last time, inflation cooled to 2.6% in March from 2.8%, and was below the 2.7% expected. However, services inflation remains too high – albeit also easing from 5.0% to 4.7%. Since then we have had a Bank of England rate cut but no signal that it is willing to up the pace of easing this cycle. Three rate setters have subsequently weighed in to say that the Bank could pause cuts for longer should inflation prove too sticky, with one citing wage growth of 5.9% as being a problem to further near-term easing. We’ve also had better-than-expected GDP data for the first quarter, though this seems to have been an anomaly driven by a rush to beat tariffs and tax hikes, and both are in the rearview mirror. Meanwhile the jobs market is cooling sharply. In short, it’s a muddy picture facing the BoE, which is waiting for more facts before it moves – which means markets will move on the data. Having pushed out the timing of easing back to around one cut per quarter, if inflation cools further it could see the market bring forward when it expects the next rate cut. That could impact rate-sensitive sectors such as Utilities, Banks, Insurers and Housebuilders.