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The Week Ahead: UK CPI; Fed minutes; Nvidia results

Read on for Michael Kramer's weekly market preview, or watch the video above for RRG Research’s analysis of major share indices.

Welcome to Michael Kramer’s pick of the top three market events to look out for in the week beginning Monday, 20 May. 

After the release of US inflation data last week, attention will turn to UK inflation on Wednesday. Further easing in consumer price growth could raise traders’ expectations of a Bank of England interest rate cut on 20 June. Meanwhile, the minutes from the Federal Reserve’s rate-setting meeting, which concluded on 1 May, may provide additional clues about how long the Fed plans to wait before cutting rates. 

Also on Wednesday, Nvidia’s results will wrap up earnings season in the US. They could prove more critical to the overall market’s health than many investors think. Since 1 November last year, Nvidia has been responsible for 15% of the S&P 500’s gains, which is more than double the next biggest contributor, Microsoft.

UK CPI (April)

Wednesday 22 May: The UK’s consumer price index (CPI) reading for April will be on traders’ radar as markets begin to handicap which major central bank will be the first to cut interest rates. The European Central Bank seems poised to cut in June, and the UK CPI report will give investors another opportunity to reprice that risk. In March, UK CPI rose 3.2% year-on-year, easing from 3.4% in February; meanwhile, core CPI increased 4.2% year-on-year in March, cooling from 4.5% a month earlier. However, services inflation remained elevated at 6%, down just a touch from 6.1% in February. While headline CPI has come down quickly in recent months, core CPI has been slower to fall, and services CPI has proved even stickier. 

Wednesday’s announcement is likely to have an impact on GBP/USD, which is sensitive to changes in expectations around rate cuts. The pound appeared to break an uptrend against the US dollar on 7 May, but instead of falling further, the pound rallied and retested the break of the trendline. If it is merely a retest, the pound should stop at resistance near $1.2680 and turn lower. If the rally is real, and the pound breaks above resistance, it could run to about $1.28, reaching the top of the long-term downtrend.

US Federal Reserve minutes

Wednesday 22 May: The Federal Open Market Committee’s minutes may not spring many surprises, given that a slew of Fed speakers have already shared their views and opinions since the May FOMC meeting. However, the minutes could give us greater clarity on the Fed’s timeline for phasing out quantitative tightening – the name given to the central bank’s effort to remove trillions of dollars of excess cash from the financial system, a remnant of its injection of emergency economic support during the Covid-19 pandemic. 

The minutes might also reveal whether there is consensus around when policymakers may be ready to cut interest rates. It could be the case that only a few FOMC members feel it would be appropriate to loosen monetary policy soon, or perhaps several members still think that rates will have to stay higher for longer. If the minutes contain comments like these, that could be enough to change the minds of any investors still hoping for a rate cut in July or September, which now seems less and less likely. 

The US two-year Treasury yield, which is closely tied to the Fed’s rate policy, is holding on to support at the important 4.75% to 4.8% region. The current rate is close to the 50-day moving average. This level provided strong resistance between February and mid-April. A break of support in this region would likely signal a more dovish take on the Fed minutes. On the other hand, if the two-year holds and moves higher, possibly back towards 5%, traders may view that as a more hawkish take, indicating that rate cuts aren’t coming soon.

Nvidia Q1 results

Wednesday 22 May: Nvidia’s results may be the most important of this earnings season. Fuelled by investor hopes for developments in AI, the stock has risen more than 90% this year to just above $943 as the company has posted substantial growth in revenue and earnings. Analysts expect the chipmaker’s first-quarter revenue to come in at $24.6bn, with earnings of $5.53 per share and an adjusted gross margin of 77%. Data centre revenue is forecast to have grown to $20.9bn. For the second quarter, analysts see revenue climbing to $26.7bn, with adjusted gross margin contracting slightly to 75.65%.

For the Nvidia share price, the $950 area has served as resistance since March. A breakthrough has proved tricky. That’s partly because momentum has turned less favourable for Nvidia, as indicated by a lower relative strength index reading. Trading volumes have been significantly lower, which raises the question of whether the stock is consolidating before another move higher or forming a top. 

Call-option volumes have also been declining and have made a series of lower highs in recent weeks, suggesting that some of the enthusiasm around the stock is cooling. If the stock can’t break above $950 following the Q1 results, traders may interpret that as a sign that most of the good news has already been priced in. A retest of the $850 region could then be the next stop.

Key economic and company events

Here’s our rundown of notable economic announcements and company reports scheduled for the coming week:


• China: People’s Bank of China interest rate decision
• Results: Keysight Technologies (Q2), Palo Alto Networks (Q3)


• Australia: Reserve Bank of Australia meeting minutes
• Canada: April consumer price index (CPI)
• Germany: April producer price index (PPI)
• Japan: April exports and imports
• Results: Lowe's Companies (Q1)


•  New Zealand: Reserve Bank of New Zealand interest rate decision, Q1 retail sales
• UK: April CPI, PPI and retail price index
• US: Federal Open Market Committee minutes
• Results: Analog Devices (Q2), Marks & Spencer (FY), Nvidia (Q1), PDD Holdings (Q1), Snowflake (Q1), Severn Trent (FY), SSE (FY), Synopsys (Q2), Target (Q1), TJX Companies (Q1)


• Australia: May consumer inflation expectations
• Eurozone: May manufacturing and services purchasing managers’ indices (PMI), May consumer confidence
• France: May manufacturing and services PMI
• Germany: May manufacturing and services PMI
• Japan: April CPI
• New Zealand: April exports, imports and trade balance
• UK: May manufacturing and services PMI
• US: May manufacturing and services PMI, initial jobless claims 
• Results: Aviva (Q1), Intuit (Q3), Medtronic (Q4), National Grid (FY), NetEase (Q1), Ross Stores (Q1), Wizz Air (FY), Workday (Q1)


• Canada: March retail sales
• Germany: Q1 gross domestic product
• UK: April retail sales
• Results: Booz Allen Hamilton (Q4)

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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