EUROPEAN SESSION

In the European session, we don’t have much on the agenda other than a couple of low tier releases like the Swiss consumer confidence and the Italian industrial production. None of the data is going to change anything for the respective central banks, so the market reaction will be muted.

Today, the US and Iran delegations are expected to arrive in Islamabad to start negotiations on a lasting peace deal. The talks are set to begin tomorrow and will last for as long as needed to reach an agreement unless one of the parties withdraws before a deal. The global economy hinges on these negotiations.

AMERICAN SESSION

In the American session, we have the Canadian employment report and the US CPI data. The Canadian employment report is expected to show 15K jobs added in March compared to -83.9K in the prior month and the unemployment rate to tick higher to 6.8% vs 6.7% prior.

Recent data has been pointing to weaker economic activity and elevated uncertainty with risks to growth tilted to the downside. The US-Iran war is expected to weigh even more on economic activity and put upward pressure on inflation. The Bank of Canada is likely to look through the inflation spike and keep rates steady because the current conditions actually point to a rate cut rather than a rate hike.

The US CPI Y/Y is expected at 3.4% vs 2.4% prior, while the Core CPI Y/Y is seen at 2.7% vs 2.5% prior. A spike in headline inflation is widely expected due to the US-Iran war, so the markets will likely look through the March report. The Fed is in a hard neutral stance but has opened the door for potential tightening in case inflation expectations start to drift higher and the war drags on longer than expected.

CENTRAL BANK SPEAKERS

• 11:00 GMT/07:00 ET – ECB’s de Guindos (neutral – voter)

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