Errante’s The Week Ahead: 26^th – 30^th May 2025 

Highlights of the Week 

• Trump’s Tariff Threats Return: Markets react as Trump targets EU and Apple with new tariff warnings. 

• RBNZ Policy & US Core PCE: Key decisions may sway NZD and USD trends ahead of June. 

• US Equities Correct Sharply: S&P 500 falls amid renewed trade war fears and debt concerns. 

What Now:  

Markets Face a Triple Threat – Trade Tensions, Debt Risks, and Growth Concerns 

Global financial markets are reeling as President Trump reignited trade war fears with threats of steep new tariffs on EU goods and Apple products. Equity markets sold off sharply, with the S&P 500 down over 1% and Nasdaq falling 2%, while bonds and gold rallied as traders sought safe haven assets. 

At the same time, investor focus is shifting back to US debt sustainability following Moody’s recent downgrade and a controversial new tax bill. Treasury yields are climbing, especially on the long end, where the 30-year yield breached 5% last week. Strategists now warn that bond vigilantes may pressure Washington to address fiscal credibility. 

In this volatile environment, key macro events include Wednesday’s RBNZ rate decision, the FOMC Minutes, US Q1 GDP revision, and the Fed’s preferred inflation gauge – the Core PCE Price Index. In Europe, German CPI may guide the ECB’s path, as markets now expect 3 rate cuts in 2025. 

Bottom Line: 

Geopolitical shocks, fiscal anxieties, and upcoming inflation data make this a critical week. Forex traders should monitor NZD, EUR, CAD, and USD pairs closely, while equity traders brace for continued volatility. With sentiment fragile, headlines from Washington and Frankfurt may shape risk appetite across all asset classes. 

Market Events and Announcements 

Monday, 26^th May 

• No High-Impact Events 

Tuesday, 27^th May 

• No High-Impact Events 

Wednesday, 28^th May 

• 4:30am – AUD CPI y/y: Previous at 2.4%; a rise could delay further RBA easing. 

• 5:00am – NZD RBNZ Rate Decision: Expected hold at 3.50% amid mixed local data. 

• 6:00am – NZD RBNZ Press Conference: Watch for forward guidance. 

• 9:00pm – USD FOMC Minutes: Focus on Fed’s tone post-sticky inflation. 

Thursday, 29^th May 

• 3:30pm – USD Prelim GDP q/q: Previous at -0.30%; another contraction would deepen recession fears. 

• 3:30pm – USD Unemployment Claims: Last at 227K; key labor market pulse. 

Friday, 30^th May 

• All Day – EUR German Prelim CPI m/m: Last at 0.40%; ECB dovishness hinges on this. 

• 3:30pm – CAD GDP m/m: Previous -0.20%; crucial for BoC stance. 

• 3:30pm – USD Core PCE Price Index m/m: Fed’s key inflation gauge. Previous flat. 

Market Insights: Key Charts to Watch 

EUR/GBP – Daily Chart 

Technical Outlook:  

The pair has returned to its broader downtrend after failing to hold above the 61.8% Fibonacci retracement at 0.8418. The recent rejection from 0.8459 leaves a bearish structure intact. RSI at 36 confirms weak momentum, while MACD remains in negative territory. 

Key Levels: 

• Resistance: 0.8418, 0.8459 

• Support: 0.8375, 0.8353, 0.8327 

Bias:  

Bearish below 0.8418; next target around 0.8350. 

S&P 500 Index (US500) – 4H Chart 

Technical Outlook:  

After peaking at 5,971, the index has broken below key trendline support and is now testing 5,758. RSI at 25 shows the index is oversold, but MACD momentum has sharply turned negative. This correction reflects macro fears tied to trade tensions and fiscal instability. 

Key Levels: 

• Resistance: 5,870, 5,971 

• Support: 5,695, 5,524, 5,386 

Bias:  

Bearish with potential bounce to 5,870, but deeper correction toward 5,695 at 23.60% retracement of the previous uptrend and 5,524 – 38.20% Fibonacci retracement – possible if sentiment worsens. 

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