This Week: Fed, BOE decisions & gold in focus

• Eyes on June Fed cut signals
   
• BOE set to cut; GBP reacts to dovish tone
   
• Gold eyes Bessent's remarks on US policy
   
• Global data may stir cross-asset volatility
   
• Ceasefire may ease safe haven asset demand

With Big Tech earnings and the US April jobs report in the rearview mirror, the coming days still features plenty of crucial market-shaking decisions by the Federal Reserve, and the Bank of England respectively, even as Trump-fuelled trade tensions continue dominating global sentiment.

With so much going on, we help focus traders’ attentions on 3 key events and corresponding assets that could present sizeable trading opportunities this week.

Events Watchlist:
 

• Tuesday, May 6th: US Treasury Secretary Scott Bessent’s testimony before the House - XAUUSD

With markets warming up to the idea that the tariff-induced selloff was overdone, Bessent’s comments on US fiscal and economic policy might either extend or negate the recent rebound in risk assets. Should Bessent speak of a more pragmatic approach moving forward that’s in contrast to President Trump’s erratic tariff rollout, while soothing recession fears, that could dampen safe haven demand and send spot gold towards $3,000.

• Wednesday, May 7th: FOMC rate decision - US500 index

To be clear about the main market event of the week, the Fed is widely expected to keep its rates unchanged at this meeting. Still, Fed Chair Jerome Powell’s press conference will be scrutinised for signs of a Fed rate cut in June, with markets predicting a 40% chance of it happening then. Should the FOMC appear more willing to resume its rate cuts cycle in June, that should cheer risk assets and send the US500 stock index towards 5800.

Also note that, on Friday (May 9th), 8 different Fed officials are set to make public speeches, coming out of the mid-week FOMC meeting. Their comments will also be studied for clues on the timing of the next Fed rate cut.

• Thursday, May 8th: Bank of England (BOE) rate decision - GBPUSD

As opposed to the Fed’s unchanged stance, the BOE is roundly expected to cut its rates by 25-basis points (bps) this week – anything else would be a shocker! Looking further out, markets currently predict a 90% chance of a further 75-bps in cuts by end-2025. If BOE officials turn more dovish, perhaps pointing to greater need to support the UK economy and offset tariffs’ negative impact, that could see GBPUSD testing its 21-day SMA for support.

Here’s a comprehensive list of other key economic data and events due this week:
 

Monday, May 5

• SG20 index: Singapore March retail sales
   
• UK markets closed
   
• US30 index: US April ISM services index
   

Tuesday, May 6

• CN50 index: China April Caixin PMIs
   
• EU50 index: Eurozone March PPI
   
• USDInd: US Treasury Secretary Scott Bessent testimony before the House; US March trade balance
   

Wednesday, May 7

• NZD: New Zealand 1Q unemployment
   
• TWN index: Taiwan April CPI
   
• EUR: Germany March factory orders; Eurozone March retail sales
   
• US500 index: FOMC rate decision
   

Thursday, May 8

• JPY: BoJ’s March meeting minutes
   
• SEK: Sweden’s Riksbank rate decision
   
• NOK: Norway’s Norges Bank rate decision
   
• TWN index: Taiwan April trade balance
   
• GER40 index: Germany March industrial production, trade balance
   
• GBP: Bank of England rate decision
   
• RUS2000 index: US initial weekly jobless claims
   
• MXN: Mexico April CPI
   

Friday, May 9

• XAU: 3-day Russia-Ukraine ceasefire begins
   
• JPY: Japan March household spending
   
• CNH: China April external trade
   
• CAD: Canada April unemployment
   
• USDInd: Speeches by New York Fed President John Williams, St. Louis Fed President Alberto Musalem, Cleveland Fed President Beth Hammack, Chicago Fed President Austan Goolsbee, Fed Governors Adriana Kugler, Michael Barr, Lisa Cook, and Christopher Waller