The Week Ahead: Core PCE, The RBNZ And RBA, And A New Fed Chair

The two forces shaping the week ahead

Step back from the noise and there are only two stories that matter right now, and they pull in opposite directions.

The first is inflation that refuses to roll over. Core inflation in the US is still stuck near 3.2 percent. German prices are running at their hottest since early 2024. Australia and New Zealand are both sitting above target. When inflation reaccelerates in this many places at once, it stops being a local story and becomes a regime. Central banks lean hawkish, the market takes rate cuts off the table, and the long end of the bond curve stays heavy. That is the backdrop that has kept the dollar firm and pinned the US ten year yield up near 4.57 percent.

The second story is the Middle East premium draining out of the oil price. A US-Iran deal that reopens the Strait of Hormuz has moved close to the line, and crude has come off as the war risk fades. Falling oil quietly takes the edge off headline inflation, even while the core stays sticky. So the two forces are in tension: a cooling energy shock on one side, stubborn underlying inflation on the other. The market is resolving that tension by buying equities and holding the dollar bid at the same time, which is exactly the kind of split tape that punishes traders who only read one signal.

The desk reads all of it through real yields and through positioning, not through the headline of the hour. That framework is the whole point of what we do, and it is the lens for everything below.

Where last week left the tape

The dollar closed Friday 22 May firm, near a six week high, with the market having priced Federal Reserve cuts out of 2026 entirely. Equities kept grinding higher. The S&P 500 logged an eighth straight weekly gain, its longest run since December 2023, and the Dow set a fresh record. The standout was oil, which fell roughly three to four percent on the week as the Iran risk premium drained, although it ticked back above 98 dollars on Friday after reports that Iran’s supreme leader had ordered the country’s enriched uranium to stay inside its borders, a reminder that the nuclear strand is not settled. Gold held its ground above 4,500 dollars.

The levels below reflect the Friday 22 May close, cross-referenced across multiple independent sources. Figures are approximate where sources differed inside tolerance. The market reopens Sunday evening into the holiday-thin Monday.

Market	Level (22 May close)	Weekly read
US Dollar Index (DXY)	99.32	Broadly flat, near a six week high
EUR/USD	1.1603	Second straight weekly loss
GBP/USD	1.3430	Firmer on the week
USD/JPY	159.20	Higher, pressing toward 160
AUD/USD	0.7127	Soft into Wednesday’s CPI
Gold (XAU/USD)	4,521 dollars	Held above 4,500, little changed
WTI crude	above 98 dollars	Down about 3 to 4 percent on the week
US 10 year yield	4.57 percent	Steadied after two days lower
S&P 500	7,473	Eighth straight weekly gain
Dow Jones	50,580	Fresh record high
Bitcoin	about 76,600 dollars	Recovered off the week’s low

Read the table as one picture. A firm dollar, firm yields, a record in equities and gold holding its highs is not a market in fear. It is a market that has accepted higher-for-longer rates and decided the growth backdrop can carry it anyway. The risk to that view is a single hot inflation print, which is exactly what Thursday delivers.

A new hand on the Federal Reserve

The biggest structural change to the rates picture did not arrive on a calendar this week, it arrived on Friday. Kevin Warsh was sworn in as the seventeenth chair of the Federal Reserve on 22 May, replacing Jerome Powell, after a Senate vote of 54 to 45, the closest confirmation for a Fed chair in modern history. You can read the confirmation detail from the Federal Reserve directly.

Why this matters for the week ahead is simple. Warsh has a long-standing reputation as an inflation hawk who is sceptical of easy policy and of a large central bank balance sheet. A hawkish chair taking over while inflation is still above target is the opposite of the dovish pivot some traders have been waiting for. It reinforces the message the curve is already sending, that cuts are not coming this year, and it raises the stakes on every inflation print, starting with Thursday’s PCE. Watch the tone of any early Warsh communication closely. A new chair setting an early marker can move the dollar and the front end as much as the data does.

US and Iran, from deadlock to the edge of a deal

For weeks the story was a stalemate. That has changed. As of Saturday 23 May, President Trump said a deal to end the war and reopen the Strait of Hormuz is largely negotiated, with final details to be announced shortly, while stressing he is in no rush and that time is on America’s side. He continues to insist Iran cannot develop or acquire a nuclear weapon.

The reported framework would declare the war over, extend the ceasefire, reopen the Strait and grant sanctions waivers that let Iran sell oil again. The harder nuclear questions, the level of uranium enrichment and the fate of the enriched stockpile, have been pushed into a later 60 day phase rather than settled now. That nuclear strand is the part that genuinely remains stuck, and Friday’s report that Iran intends to keep its enriched material on home soil is a live example of how it can snag. Tehran has not confirmed the broader terms and disputes the framing on the Strait and on the order of sanctions relief. Nothing is signed, and it could still slip.

For markets the read is clean. The oil risk premium has been draining, with Brent back below 100 dollars, and a clean signing would extend that move and feed through to softer headline inflation over time. The tail risk runs the other way. A collapse back toward the war footing is the kind of event that snaps crude and gold higher in a single session, regardless of what the economic calendar says. This sits at the top of the desk’s watch list every day this week, because it is the one driver with no scheduled time and the largest two-way range.

The economic calendar for the week ahead

Here is the schedule that decides the next five sessions, with the reasoning behind each entry. All times are BST.

Monday 25 May, the market is closed

A triple bank holiday. The UK observes the Spring Bank Holiday, the US observes Memorial Day with equity and bond markets shut, and much of continental Europe, including Germany and France, observes Whit Monday. Expect very thin volume, wider spreads and gap risk on anything that does trade. The practical takeaway is to treat Monday as noise, not signal. A move on holiday liquidity tells you almost nothing about conviction, and it is the easiest day of the week to get stopped on a print that reverses the moment real desks return on Tuesday.

Tuesday 26 May, the US consumer in focus

US Consumer Confidence for May lands at 15:00, the first real data point of the week as US desks come back from the long weekend. Sentiment has already been soft under the weight of the earlier energy spike, so the market is watching whether the household is starting to crack or starting to stabilise as oil comes down. It is a second-tier number, but in a quiet week with desks rebuilding positions it can set the early tone for the dollar.

Wednesday 27 May, the Asia session is the event

This is the first of the two sessions that decide the week, and it happens while London sleeps.

RBNZ rate decision and Monetary Policy Statement, 02:00. The consensus is a hold at 2.25 percent, but this is not a quiet hold. Inflation in New Zealand is above the target band and a fuel shock is still feeding through, so there is a live debate over whether the bank should hike to 2.50 percent now to head off a second round of price rises. This is also the first meeting under the bank’s new transparency regime to publish individual member votes when the committee does not reach consensus. That means the risk for the New Zealand dollar is in the vote split and the tone, not in the headline. A hawkish hold, or an outright dissent toward a hike, would lift the kiwi hard. You can see the official meeting detail from the RBNZ.

Australia April CPI, 02:30. Thirty minutes later, the Australian inflation print. Context is everything here. The Reserve Bank of Australia has just hiked to 4.35 percent, its third increase this year, and stayed firmly hawkish, with the Middle East fuel shock adding to the upside risk on inflation. A hot CPI keeps further tightening on the table and supports the Australian dollar. A cooler number, which is what the market leans toward, takes some wind out of the Aussie and validates the case for the bank to finally pause. With two antipodean events inside thirty minutes in thin pre-London liquidity, the moves can overshoot in both directions. You can follow the rate path from the Reserve Bank of Australia.

Thursday 28 May, the pivot of the week

If you only clear your screen for one session, make it this one. Two heavyweight US releases land together at 13:30.

US Core PCE for April, 13:30. This is the Federal Reserve’s preferred measure of inflation and the single most important number of the week. It has been running near 3.2 percent year on year, well above the 2 percent target. A firm reading effectively confirms no cuts in 2026, supports the dollar and pressures gold. A soft reading is the main threat to the strong dollar trade and would give the equity melt-up another leg. With a hawkish new chair in the chair, the bar for a dovish surprise to actually shift policy expectations is higher than it was a month ago. The release detail comes from the US Bureau of Economic Analysis.

US Q1 GDP, second estimate, 13:30. Released in the same minute as PCE. Watch the price deflator inside it as closely as the growth line, because the market is alert to any hint of stagflation, soft growth with sticky prices. A downward growth revision paired with a firm deflator is the uncomfortable combination for risk assets.

The supporting cast. Weekly jobless claims and the EIA oil inventory report, both delayed by the Monday holiday, also land Thursday. In a week this compressed, even the second-tier US data is bunched into one afternoon, which raises the odds of an outsized move when several prints lean the same way.

Friday 29 May, sterling and the loonie

Bank of England Governor Bailey speaks, 09:20 at the Reykjavik economic conference. With the market still trying to read the path of UK rate policy, sterling is sensitive to any steer on the timing of cuts or the bank’s read on services inflation. The Governor’s remarks are the week’s main event for the pound. Watch the Bank of England for the text.

Canada Q1 GDP, 13:30. The Canadian dollar’s main domestic catalyst of the week, released alongside the March monthly figure, and a key input for Bank of Canada pricing.

German and French flash CPI. The first look at May inflation in the euro area’s two largest economies, a steer for the European Central Bank and for the euro ahead of the bloc-wide print the following week.

The cross-asset read for the week ahead

Here is how the calendar maps onto the assets the desk follows most closely.

The dollar. The bullish case stays intact unless Thursday’s PCE undershoots. A firm dollar near a six week high, backed by no cuts priced and a hawkish new chair, is the path of least resistance. EUR/USD below 1.16 and AUD/USD below 0.71 are the levels that would confirm continuation lower. A soft PCE is the one scheduled event that can break the trend.

Gold and silver. Gold is holding above 4,500 dollars but rangebound, and its next direction hinges almost entirely on Thursday’s PCE and the dollar. The more interesting tell is in silver, which has been outperforming, compressing the gold to silver ratio. When silver leads, it often signals a later-stage move in the metals complex, so the ratio is worth tracking as a confirmation or a warning, not just the gold price in isolation.

The Australian and New Zealand dollars. This is the cleanest event-driven setup of the week. Both currencies walk into back to back central bank and inflation risk inside the Wednesday Asia session, in thin liquidity. The Aussie is soft going in, which sets up an asymmetric squeeze if CPI runs hot, while the kiwi hangs on the RBNZ vote split. These are the pairs where the desk expects the largest reaction relative to expectations.

Sterling. The pound firmed last week and now faces a single concentrated risk on Friday in the Bailey speech. With no UK data of the first rank this week, the Governor carries the whole load for sterling, which makes the pound a headline-driven trade into the weekend.

The yen. USD/JPY is pressing toward 160. The closer it gets, the higher the risk of intervention from the Bank of Japan, verbal first, then real. 160 is the line in the sand the whole market is watching, and a break that runs could trigger a sharp, official-flow reversal.

Oil. Crude is the Iran trade. The premium has been draining as the deal advances, but Friday’s enriched-uranium headline shows how fast a snag can put the premium back. There is no OPEC meeting this week, the next is in June, so the energy leg is entirely headline-driven.

Equities and bitcoin. The S&P 500 has now risen for eight straight weeks against yields above four and a half percent and zero cuts priced, which is a remarkable show of strength and also a stretched one. The first weekly down close would be the sentiment tell worth respecting. Bitcoin recovered off its weekly low to about 76,600 dollars and continues to trade as a high-beta risk proxy, so it takes its cue from the same dollar and rates signals as the rest of the risk complex.

Two scenarios for the week ahead

Rather than predict, the desk maps. Thursday’s Core PCE is the fork in the road, so here is how the week likely plays out under each outcome.

Scenario one, a firm PCE. If core inflation comes in at or above expectations, the higher-for-longer trade extends. The dollar pushes through its recent range, the ten year yield grinds back toward 4.6 percent and above, gold struggles to hold 4,500 dollars, and the rate-sensitive corners of the equity market wobble even if the index level holds. A hawkish new chair makes this the path of least resistance, because there is no dovish counterweight at the top of the Fed to lean against it. In FX this is broad dollar strength, with EUR/USD pressing the 1.15 handle and the Aussie heavy unless its own CPI has already rescued it on Wednesday.

Scenario two, a soft PCE. If inflation cools more than expected, it is the one scheduled crack in the strong dollar story. Yields ease, gold gets its bid back and tries to retake the highs, and the equity run gets a fresh leg as the no-cuts pricing is questioned at the margin. The dollar gives back some of its six week climb. The catch is that a single soft print does not undo a hawkish chair or a re-accelerating global inflation picture, so the desk would treat a dollar pullback here as a move to fade rather than a trend change, unless the data keeps cooling into June.

The reason to hold both scenarios in your head is simple. The worst position a trader can be in is married to one outcome. Mapping the two in advance removes the surprise and lets you act on the number instead of freezing on it.

The key levels the desk is marking

These are reference levels, not instructions. They are the prices where the desk expects the market to make a decision, drawn from where price has reacted recently.

• Dollar Index: the six week high near 99.5 to 100 is the ceiling to clear, with 98.3 the first support if PCE disappoints.
• EUR/USD: 1.16 is the pivot, 1.15 the downside magnet on a firm dollar, 1.17 the cap on a soft one.
• USD/JPY: 160 is the line the whole market watches for intervention, 157.5 the first support on any official-flow reversal.
• Gold: 4,500 dollars is the floor that has held, a clean break opens 4,400, while a soft PCE puts the recent highs back in play.
• AUD/USD: 0.71 is the battleground into CPI, 0.7050 the breakdown level, 0.72 the squeeze target on a hot print.
• WTI crude: the high 90s is the range, with the Iran headline able to override the chart in either direction in seconds.
• S&P 500: the record high is the resistance, and the first weekly down close after eight up weeks is the sentiment tell that matters more than any single number.

What the desk is watching, not telling you to do

The desk does not hand you entries. It hands you the framework. Four things to hold in your head this week.

First, thin liquidity does not mean low risk. A holiday Monday into a data-heavy Thursday is exactly the setup where a single print moves more than it should, because there are fewer participants to absorb it. Size for the gap, not for the calm.

Second, Thursday is the hinge. Core PCE and GDP in the same minute, read by a market that has priced out cuts and just installed a hawkish chair. If PCE runs hot, the higher-for-longer trade extends and the dollar pushes on. If it cools, that is the one scheduled crack in the strong dollar story.

Third, the antipodean session is where expectations are most likely to be wrong-footed. Two events, thirty minutes apart, in pre-London liquidity. That is where overshoots happen.

Fourth, Iran has no clock. The deal is advancing but unsigned, and the nuclear strand can snag at any hour. Crude and gold carry that tail risk into every session, so a calm calendar does not mean a calm tape.

Read the framework, not the noise. The desk is live through every print this week, with the named levels, the cross-asset map and the running commentary inside the room.

Frequently asked questions

What is the most important release in the week ahead? US Core PCE for April on Thursday 28 May at 13:30 BST. It is the Federal Reserve’s preferred inflation gauge and the print most likely to move the dollar, gold and the rate path.

Why is Monday so quiet? It is a triple bank holiday. The UK, the US and much of Europe are all closed, so liquidity is very thin and any moves are unreliable.

Is the US-Iran war over? Not formally. As of 23 May a deal to end the war and reopen the Strait of Hormuz is reported to be largely negotiated, but it is unsigned, Tehran has not confirmed the terms, and the nuclear questions are deferred, so it can still slip.

Who is the new Fed chair and does it change anything? Kevin Warsh, sworn in on 22 May, replacing Jerome Powell. He is viewed as more hawkish, which reinforces the market’s pricing of no rate cuts in 2026.

What will the RBNZ and RBA do? The RBNZ is expected to hold at 2.25 percent on 27 May with a live hike debate, while the RBA has already hiked to 4.35 percent and stayed hawkish, which makes Australian CPI the same day the key antipodean catalyst.

What time is Australian CPI released? The April monthly CPI indicator is due Wednesday 27 May at 02:30 BST, which is 11:30 in Sydney, thirty minutes after the RBNZ decision, so both land inside the same pre-London Asia session.

Why is the US dollar so strong right now? Two reasons. Inflation has reaccelerated, so the market has priced out Federal Reserve rate cuts for 2026, and a new, more hawkish chair has just taken over. Higher-for-longer US rates pull capital toward the dollar and keep it bid against most majors.

What is the Strait of Hormuz and why does it move oil? The Strait of Hormuz is the narrow waterway at the mouth of the Gulf through which a large share of the world’s seaborne crude passes. When it is threatened or disrupted, traders add a risk premium to oil. As the US-Iran deal to reopen it advances, that premium has been draining out, which is why crude has fallen even as the rest of the inflation picture stays warm.

This is general market analysis and commentary from the KenMacro desk, not financial advice or a trade signal. Levels are cross-referenced from public sources at the Friday 22 May 2026 close and may change. Trading leveraged products carries a high risk of loss. KenMacro may earn a commission from the brokers featured, at no cost to you.