Oil heavyweight Saudi Aramco reports results against a brittle backdrop, while data from big economies could sharpen the contours of the Middle East conflict’s economic impact.
1. TRUMP GOES TO BEIJING
The U.S. President visits Beijing on May 14-15, his first China visit in eight years. He will try to lock in the trade truce agreed in October in South Korea, and avoid a rerun of the tit-for-tat tariff battle that he set off on “Liberation Day” in April 2025. Taiwan could also feature when he meets Chinese President Xi Jinping. The context is far from calm. Chinese exports are booming, with the trade surplus at the end of 2025 roughly the size of the Dutch economy, while factory activity has expanded since the start of the Iran war at the end of February, private and official surveys show. Trade data due this weekend should offer a reality check on whether a protectionist White House has managed to dent Americans’ appetite for Chinese-made goods.
2. A BRITTLE SITUATION
The world’s biggest exporter of crude oil, Saudi Aramco, reports first-quarter results on Sunday. The numbers are expected to show the pain from the more than two-month-old conflict that has all-but closed the Strait of Hormuz and caused some 20 oil refineries in the region to be damaged or shut down, taking millions of barrels of capacity offline and pushing oil prices sharply higher. Progress to end the war in the Middle East has been slow. Clashes between U.S. and Iranian forces in the Gulf in recent days are endangering a month-old ceasefire and shaking hopes for a diplomatic solution. All this comes as Washington awaits a response from Tehran to its proposal to end the conflict – an outline for a temporary agreement expected to leave many of the most contentious issues unresolved.
3. PUMPS AND PRICES
A data-heavy week ahead should give a clearer sense of how much the war-driven spike in energy prices is stoking inflation in the world’s largest economy – and whether consumers are losing their appetite to spend. Tuesday’s U.S. April consumer price index is expected to rise 0.6% after March’s 0.9% jump, the biggest increase in almost four years, according to a Reuters poll. Pump prices are likely to loom large in the numbers. Producer price data for April on Wednesday is another inflation checkpoint after the Fed’s last meeting exposed a more hawkish tilt among some policymakers who are increasingly uneasy about price pressures. Retail sales figures on Thursday should show whether higher gas and other costs are starting to bite into household spending.
4. ASIA PAIN
Japan current account numbers on Wednesday and earnings from the Japanese megabanks out over the week will offer a pulse check on how the country’s export-heavy economy is faring as the Iran war drags on. On Tuesday, the Bank of Japan’s April meeting summary will be released after not one but three dissenting voices – giving investors a closer look at how fractured the policy debate has become. Bond investors will also digest sales of 10-year and 30-year Japanese government bonds, a test of appetite for long-dated debt after suspected official interventions in Tokyo to boost the yen over the last fortnight.
And U.S. Treasury Secretary Scott Bessent will meet Japan’s prime minister, central bank governor and finance minister when he begins a visit to Japan on Monday, before heading to China.
5. A QUESTION OF GROWTH
Investors will parse Britain’s March growth data on Thursday for the first official signs of the extent of the economic damage from the Iran war. The release coincides with the first-quarter figures, though those may flatter to deceive after a punchy February. Britain looks vulnerable. The IMF gave it the biggest growth downgrade among big economies for this year, cutting its forecast to 0.8% from 1.3%. Borrowing costs have jumped more than anywhere else among the Group of Seven advanced economies as higher energy prices feed through. Any signs of weakening growth would land at an awkward political moment. Local elections have dealt a blow to Prime Minister Keir Starmer’s Labour Party, raising doubts about his leadership. Markets will also watch for revisions in the second read-out of euro zone growth first quarter on Wednesday, which had come in at a meagre 0.1%.
