Economy Spotlight the Most Important Events and What's Coming 28april-03may/2025

Introduction:

This week's issue of the Economy Spotlight Report is titled "A Glimmer of Hope for the Global Economy," which will be discussed by reviewing the most important events of the past week and what lies ahead for the global economy this week.

Main keywords:

Ø  China announces a plan to revive its economy and increase its resilience to economic difficulties and indicates positive measures regarding the struggling real estate sector since 2021.

Ø  Japan announces a package of emergency economic measures to counter the negative effects of US tariffs.

Ø  The US awaits very important economic data on inflation and the labor market this week.

Ø  Four major companies will release their earnings this week.

Ø  Europe announces a $200 billion plan to support the technology sector.

Ø  The Bank of Japan holds its meeting at the end of this week amidst the economic situation.

Ø  Japan heads to the US this week for the second round of trade negotiations.

Economy Spotlight. Major Economies:

First. The US Economy:

Despite the difficult start to last week for US financial markets, US President Donald Trump's retraction of his attacks on Federal Reserve Chairman Jerome Powell, along with his comments about fruitful talks with China regarding tariff reductions and the possibility of reaching a mutually beneficial trade agreement, led to a positive correction in the markets.

These positive developments coincided with the International Monetary Fund meetings, which also warned of tariffs and their negative impact on the global economy.

Seven members of the US Federal Reserve also issued statements last week warning against Trump's tariffs, while emphasizing the strength and resilience of the US economy so far.

As for economic indicators, the last week was somewhat positive, with improved manufacturing and services purchasing managers' indices, and an increase in new home sales, while existing home sales declined.

The US economy also awaits an important week in terms of economic data, most notably:

• Job opportunity .

• Consumer confidence.

• The non-farm payrolls index.

• The first-quarter GDP index.

• The personal consumption expenditures price index (the Federal Reserve's preferred inflation indicator).

• Average wages and the unemployment rate.

Other issues the US economy is anticipating relate to trade negotiations, which are expected to become clearer, particularly regarding the Japanese side and others.

 In addition to these important issues, the US economy will have data on 180 companies in the Standard & Poor's 500 Index, which represents more than 40% of the index's market capitalization, including four of the amazing seven companies: Apple, Microsoft, Amazon, and Meta.

Second. European Economy:

The European side announced significant initiatives to chart new horizons for Europe's digital future, including a $200 billion pledge for artificial intelligence and an unprecedented focus on quantum computing, cloud computing, semiconductors, and data storage.

Europe will host GITEX Europe X in Berlin from May 21-23, highlighting Europe's role in technology. This will be the largest European technological event.

Last week, the European Commission announced important figures for the eurozone: the government deficit-to-GDP ratio fell from -3.5% in 2023 to -3.1% in 2024, while the government debt-to-GDP ratio rose slightly. The European Commission also called on several countries to implement corrective measures for the economy and employment.

The European Central Bank warned of Trump's tariffs and expressed its focus on adopting cryptocurrencies and challenging EU cryptocurrency market regulations. These developments coincided with the International Monetary Fund's downgrade of its eurozone growth forecasts for this year and next, amid economic uncertainty due to US tariffs. Meanwhile, IMF Managing Director Georgieva praised Germany's fiscal transformation and the UK's reforms, describing them as a lifeline for the struggling European economy.

Third. Japanese Economy:

Japan is preparing for a second round of bilateral trade negotiations with the United States this week, amid poor economic data, particularly with regard to inflation, which remains stubbornly high, complicating the Bank of Japan's task.

However, the Japanese government has unveiled a package of emergency economic measures to counter the negative effects of US tariffs.

The relief package consists of five main components, including support for corporate financing and steps to stimulate consumption, including lower gasoline and diesel prices, subsidies for energy bills, and consideration of expanding low-interest loans to small businesses starting in May.

Japanese Prime Minister Ishiba has stated that he is making every effort to mitigate the impact of tariffs on domestic industries such as automobiles and steel.

This all comes ahead of the departure of Economic Revitalization Minister Ryusei Akazawa to the United States for three days of talks starting Wednesday with Treasury Secretary Scott Bessent, who is responsible for the negotiations with the Japanese side.

Fourth. Chinese Economy:

China announced an economic plan to address its ongoing economic problems, both internally, due to weak domestic demand, and externally, due to US tariffs.

Some Chinese reports have suggested the possibility of removing some tariffs on some US products, including semiconductors, to counter external economic shocks that are hampering China's ability to revitalize its economy as hoped.

Beijing continued to deny US President Trump's claims that there were communications between him and China regarding their difficult trade dispute.

China also promised several measures, most notably:

• Interventions to support the domestic economy.

• Protecting individuals and businesses from the impact of Trump's tariffs.

• Increasing unemployment insurance payments.

• Increasing low- and middle-income incomes.

• Developing the service sector and boosting consumption.

Regarding the struggling real estate sector, China emphasized the need to accelerate the development of a new real estate model, increase housing stock, and intensify urban renewal and modernization.

Economy Spotlight. Economic Calendar and What to Expect in the Markets Next Week:

Global markets will be awaiting the following economic data: