Global financial markets head into a crucial week with geopolitical tensions in the Middle East and key inflation readings dominating investor attention. Fragile ceasefire conditions between the US and Iran continue to keep energy markets volatile, raising concerns about inflationary pressures worldwide.

US: In the United States, markets will closely track April consumer and producer inflation data as investors look for clues on future Federal Reserve policy moves. Rising oil prices linked to Middle East tensions are expected to push headline inflation higher, while retail sales and industrial production figures will offer insight into the strength of the US economy. Attention will also turn to the US Senate’s vote on Kevin Warsh’s nomination as the next Federal Reserve Chair, ahead of Jerome Powell’s term ending later this week. Meanwhile, earnings from major companies including Cisco Systems, Applied Materials, and Constellation Energy will remain on investors’ radar.

Europe: In Europe, the United Kingdom is expected to report its strongest quarterly economic growth in a year despite signs of slowing industrial activity. Germany’s closely watched ZEW Economic Sentiment Index may fall for a fourth consecutive month as geopolitical uncertainty weighs on confidence. The Eurozone will also publish industrial production and updated GDP figures, which could indicate whether economic activity is beginning to stabilize after a sluggish start to the year.

Asia: Asian markets will focus heavily on China’s inflation and credit data. Chinese consumer inflation is expected to cool slightly, while producer inflation may hit its highest level since 2022, signaling renewed cost pressures in the manufacturing sector. In Japan, investors will look for fresh guidance from the Bank of Japan regarding future monetary policy, while India’s inflation readings are expected to edge higher amid rising food and energy prices. Corporate earnings across Asia will also attract attention, with results due from Tencent, Alibaba Group and Commonwealth Bank.

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