Macroeconomic & Geopolitical

Up, Up, but Not (Run) Away Inflation

May 2021 – 3 min read
The latest round of euro area lockdowns caused less damage than initially feared. Earnings on both sides of the Atlantic continue to beat expectations amid the favorable economic backdrop. Meanwhile, in China, PMIs suggest that the growth driver may be shifting.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • The consumer price index is set to rise further in April due to base effects, higher energy prices, and continued reopening of the economy. We will watch market reaction, particularly if there is a surprise to the upside.
  • April retail sales are expected to moderate from March as the boost from one-off stimulus checks fade. However, spending should remain strong in the near-term, given healthy consumer finances and the easing of restrictions.


  • U.K. Q1 GDP will show the combined impact of renewed COVID restrictions and trade frictions imposed by Brexit. Consensus is expecting a very sharp contraction: -1.7% Q/Q. The composition of GDP (exports vs. internal demand) will be particularly interesting to gauge the impact of Brexit.

Asia Pacific

  • China aggregate financing likely eased amid slower household loan growth and a decline in off-balance sheet financing.
  • With commodity prices and transportation costs remaining high, China PPI is expected to stay at high levels, though moderation in sequential M/M growth is consistent with a decline in PMI price indices. China CPI should also edge higher, driven by a modest rise in non-food inflation and a recovery in services inflation. 

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