The Week Ahead: UK inflation, global PMI data, Home Depot earnings

Although we’re heading into a quietish week for economic and company announcements, there are still a few notable dates for your diary. On the earnings front, multinational home improvement retailer Home Depot stands out. After fellow retailer Walmart warned that prices are set to rise in the future as a result of tariffs, investors will be monitoring Home Depot’s earnings call on Tuesday for similar guidance. Meanwhile, the UK’s consumer price index (CPI) reading for April, out on Wednesday, is expected to show an uptick in inflation. Rising prices could have implications for Bank of England interest rates and the GBP/USD exchange rate. Plus, we continue to look out for unscheduled market-moving news, with US president Donald Trump’s backtracking on the trade war he initiated likely to remain in the headlines. 

Home Depot Q1 earnings

Tuesday 20 May
Analysts expect Home Depot to report first-quarter earnings of $3.59 a share, down roughly 1% from the year-ago period, with revenue forecast to have risen 8% year-on-year to $39.3bn. Gross margin is estimated to come in at 33.9%. Looking ahead to the second quarter, analysts expect earnings to grow 2.6% to $4.72 a share, driven by revenue growth of 5.3% to $45.5bn. Gross margin is projected to tighten slightly to 33.3%. The options market is currently pricing in a post-Q1 earnings move higher or lower of approximately 3.9% for the retailer’s shares, which have gained more than 9% in the past month to close at $378.63 on Thursday.

Technical analysis suggests that the stock may have completed a head-and-shoulders pattern, and that the ensuing bearish downturn could be giving way to an uptrend. Momentum, as measured by the relative strength index, is rising. The possible reversal could send the stock, a constituent of the Dow Jones, up towards resistance at $385. This level is likely to be a significant test. Strong Q1 results and a positive outlook could propel the stock beyond this level, potentially to around $400. However, disappointing results or a weak outlook could send the shares down to a gap near $362.

UK April CPI

Wednesday 21 May 
Economists estimate that UK consumer prices increased 3.3% in the year to April, up from 2.6% in March, potentially putting inflation at its highest level since February 2024. Core inflation – which removes volatile food and energy prices – appears to be settling in the 3% to 3.5% range. 

With inflation stubbornly refusing to fall to the Bank of England’s 2% target, policymakers may be reluctant to lower interest rates too sharply. The upcoming CPI data could therefore influence how many rate cuts markets price in for the remainder of 2025. Currently, markets anticipate two further cuts before the year’s end.

Rate cut expectations have a bearing on where the pound-dollar rate is likely to go next. The pound, which was trading at just shy of $1.33 on Friday morning, may need a stronger-than-expected CPI print to overcome resistance at $1.34. Given the ongoing trade-war headlines and the general trend of dollar weakness, the pound could strengthen against the dollar independently, regardless of UK inflation data. However, a more hawkish (pro-higher rates) stance from the Bank of England certainly wouldn’t hurt. A breakout above $1.34 could pave the way for GBP/USD to rally towards the next level of resistance at $1.37.

Global May PMI data

Thursday 22 May 
The US purchasing managers’ index (PMI) data from S&P Global will provide the first indication of the trade war’s impact on American companies in May, potentially offering a clearer and more up-to-date view of business conditions and inflation than the recent US CPI reading, which showed a surprise drop in inflation to 2.3%. Major European countries are set to release their latest PMI readings the same day. Any indication that growth in the US or Europe is suffering as a result of tariffs could trigger a flight to safety, perhaps benefiting assets such as gold.  

Gold slipped to around $3,200 per troy ounce on Friday, having formed an apparent double-top pattern and broken below the neckline – a bearish formation. If this pattern continues to play out, prices could fall towards $3,050. However, if prices recover, they could move back above the neckline to around $3,250. That might signal a failed breakdown, potentially spurring gold on to retest the previous highs near $3,400.

Economic and company events calendar

Major upcoming economic announcements and scheduled US and UK company reports include:

Monday 19 May

• China: April retail sales, April industrial productions
• Eurozone: April harmonised consumer price index (CPI)
• Results: Qifu Technology (Q1)

Tuesday 20 May

• Australia: Reserve Bank of Australia interest rate decision
• Canada: April CPI
• China: People’s Bank of China interest rate decision
• Germany: April producer price index (PPI)
• Japan: April exports, imports and merchandise trade balance
• New Zealand: April exports, imports and trade balance 
• Results: Home Depot (Q1), Keysight Technologies (Q2), Palo Alto Networks (Q3), Vodafone (FY)

Wednesday 21 May

• Australia: May preliminary Judo Bank purchasing managers’ index (PMI) data  
• UK: April CPI, April PPI
• Results: Baidu (Q1), Lowe's Companies (Q1), Medtronic (Q4), Snowflake (Q1), SSE (FY), Target (Q1), TJX Companies (Q1), Zoom Communications (Q1)

Thursday 22 May

• Eurozone, France, Germany, UK, US: May preliminary PMI data
• Eurozone: May preliminary consumer confidence index
• Germany: May business climate index
• Japan: April CPI
• New Zealand: Budget, Q1 retail sales
• UK: May GfK consumer confidence index
• US: Weekly initial jobless claims 
• Results: Analog Devices (Q2), Autodesk (Q1), BT (FY), easyJet (FY), Intuit (Q3), Tate & Lyle (FY), Workday (Q1)

Friday 23 May

• Canada: March retail sales
• Germany: Q1 gross domestic product (GDP)
• UK: April retail sales
• US: April new home sales data
• Results: AJ Bell (HY)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

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