Market movers ahead
In the US, the coming week brings CPI figures for March. We forecast CPI core increased 2.3% y/y while headline likely increased 2.8% y/y, i.e. we expect to see the acceleration in inflation turn into deceleration. Note that while these numbers are well above 2%, the Fed is more concerned about PCE core inflation, which is still below 2%.
The coming weeks also bring a few speeches by FOMC members, where the focus is on the Fed's intention to start quantitative tightening soon, see FOMC minutes: Quantitative tightening is moving closer, 5 April.
In the euro area, the Sentix investor confidence and German ZEW expectations are due out next week.
In the UK, the most important data release next week is the CPI inflation data for March. We expect total CPI rose 0.4% m/m in March implying an unchanged inflation rate at 2.3%. We still expect CPI inflation to move higher this year and to peak around 3%. Despite higher inflation, the Bank of England will likely remain on hold through the Brexit negotiations, see also Bank of England Review: Maintains neutral stance with hawkish twist, 16 March.
Global macro and market themes
Mounting signs that the global business cycle is peaking.
We expect a pause in the equity bull market and that risk factors move back to the fore.
We still expect the bond bear market is over for now.
Fading reflation supportive for the USD. We expect short-term USD strength but weakening longer term.
Positive start to Trump-Xi meeting - but differences on trade will come into focus in H2.
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