The dollar remains in a more stable mood heading into European morning trading. At the same time, stock futures are slightly higher while bond yields remain buoyed. It’s been a pretty positive start to the week, all things considered.
Looking ahead to the session ahead, inflation data is in focus as we receive the UK release and final reading for the Eurozone in March. The first one will be the most important as such, so let’s see what to expect.
UK Underlying CPI YoY (%)
Headline annual inflation is expected to fall to 3.1%, from 3.4% in February. At the same time, annual core inflation is expected to fall from 4.5% to 4.1% last month. This last statistic is the most important, but as it still remains above 4%, it should not yet bring too much comfort to the BoE.
As for the odds of a rate cut, traders rate a 71% chance of such a move happening in August. As for the year itself, rate cuts worth 42 basis points are now planned. Honestly, short of a drop in core prices below 4%, I don’t think the current data will move things too much. But if price pressures remain more stubborn, i.e. around 4.3% or more, I can see this leading to a rise in the British pound as traders reduce their bets on the month. ‘august.
06:00 GMT – UK CPI figures for March
09:00 GMT – Final Eurozone CPI figures for March
11:00 GMT – MBA Mortgage Applications in the United States. April 12
That’s all for the upcoming session. I wish you good days ahead and good luck in your trading! Stay safe out there.
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