EUROPEAN SESSION

In the European session, the main highlight will be the Eurozone inflation data. The Headline CPI Y/Y is expected at 2.6% vs 1.9% prior, while the Core CPI Y/Y is seen at 2.4% vs 2.4% prior.

Having said that, inflation is expected to increase substantially in March due to elevated energy prices, so it’s not going to be a surprise at all. The ECB will likely look through the March inflation spike but might also lay the groundwork for a rate hike in June if the US-Iran war and the supply disruptions continue.

The market is pricing a 58% chance of a rate hike in April and 86% in June. The total tightening expected by year-end is 70 bps.

AMERICAN SESSION

In the American session, we get the US Consumer Confidence and the US Job Openings data. The US Consumer Confidence is expected at 88.0 vs 91.2 prior. A lower than expected figure wouldn’t be a surprise of course given that the war and higher energy prices are negatively impacting growth expectations while increasing inflation fears.

The US Job Openings is expected at 6.890M vs 6.946M prior. The labour market has been clearly stabilising in the first part of the year as tariff and business uncertainty eased. The US-Iran war brought renewed uncertainty while also weighing heavily on the stock market. This could weaken the labour market in the short-term. Anyway, the Job Openings data is for February, so it’s old news and will likely be ignored.

Lastly, it goes without saying that the focus is solely on US-Iran headlines and the ongoing negotiations. WSJ reported tonight that Trump would be open to end the war without pushing for a reopening of the Strait of Hormuz. That would be great news for the markets as the Iranians will likely reopen the Strait as soon as the US forces withdraw.

But, we will need Trump to announce that to make it happen. He’s certainly very uneasy right now with the stock market making new lows, much higher Treasury yields, triple digit oil prices and the Fed in “wait and see” mode.

CENTRAL BANK SPEAKERS

• 07:00 GMT/03:00 ET – ECB’s Panetta (neutral – voter)
• 07:30 GMT/03:30 ET – ECB’s Muller (hawkish – voter)
• 08:00 GMT/04:00 ET – ECB’s Kazimir (hawkish – voter)
• 13:10 GMT/09:10 ET – ECB’s Sleijpen (neutral – voter)
• 16:00 GMT/12:00 ET – Fed’s Goolsbee (neutral – non voter)
• 17:10 GMT/13:10 ET – Fed’s Schmid (hawkish – non voter)
• 19:00 GMT/15:00 ET – Fed’s Barr (neutral – voter)
• 21:00 GMT/17:00 ET – Fed’s Bowman (dovish – voter)

This article was written by Giuseppe Dellamotta at investinglive.com.