Global equity markets have had a quiet start to the week as investors await a key U.S. inflation reading due later today.

Eurozone inflation slowed to 1.9% in May, down from 2.2% in April, marking the first time since September 2023 that price growth has dipped below the European Central Bank’s 2% target. Core inflation, which excludes volatile items such as food and energy, also declined to 2.4%, compared to 2.7% the month before.

Tentative signs of improvement have surfaced in China’s industrial sector. Data from the National Bureau of Statistics showed that industrial profits rose 1.4% year-on-year between January and April, which is an improvement from the 0.8% growth recorded in the first quarter.

UK inflation came in higher than expected for April, with the Consumer Price Index (CPI) rising to 3.5%, up from the 2.6% rise in prices in March. Core inflation—which strips out the more volatile categories of energy, food, alcohol, and tobacco—also climbed, reaching 3.8% in the 12 months to April, compared to 3.4% in the previous period.

The United States and China announced a breakthrough in trade talks on Monday, agreeing to pause most of the tariffs imposed on each other’s products for a period of 90 days. As part of the deal, both nations will significantly reduce their mutual tariffs— the US will cut tariffs on Chinese goods from 145% to 30%, while China will cut tariffs on American imports from 125% to 10%.

On Monday, the Caixin PMI revealed a slowdown in activity in the Chinese economy, with the index slipping to 50.7 in April from 51.9 in March. Although this marked the 28th straight month of expansion, it was the weakest reading since September 2024, reflecting growing uncertainty in the service sector.

Markets have lacked clear direction this week, as a period of relative calm settled over the economic data landscape. With fewer surprises on that front, investor focus shifted toward upcoming earnings from major corporations and the release of key economic indicators that’s kept them cautious so far.

Market movements can often seem erratic when viewed day to day – prices rise one day, and fall the next, sometimes without any clear explanation. This short-term volatility is especially noticeable during periods of uncertainty, and it’s natural to feel unsettled.

Market jitters spiked early in the week as President Donald Trump’s aggressive tariff strategy—especially targeting China—collided with his unusually sharp criticism of Federal Reserve Chair Jerome Powell. Labelling Powell a “loser” and “Mr. Too Late” for not slashing interest rates sooner, Trump stirred uncertainty across financial markets.

This last week has brought calmer waters for global financial markets, with volatility easing across major regions. It’s a shortened trading week in the UK, Europe, and the US, with markets closed on Good Friday, and UK and European exchanges also shut on Easter Monday.