This week's economic calendar is packed with events, with a focus on central bank meetings, inflation data, and geopolitical tensions. Here's a breakdown of the key events and their implications:
Central Bank Meetings
- RBNZ (April 8): Expected to hold the Official Cash Rate at 2.25%, with a 'hawkish hold' narrative due to rising energy prices. The bank may acknowledge second-round effects from higher fuel and freight costs.
- RBI (April 11-13): Likely to pause and keep the repurchase rate at 5.25%, with a focus on consumer inflation and the Middle East conflict. Uncertainty from shipping disruptions may keep the bank cautious.
- BoK (April 12): Expected to hold the base rate at 2.50%, with a focus on the property market and housing risks. Uncertainty from the Middle East conflict makes a final policy move unlikely.
Inflation Data
- US PCE (April 28): Expected to show a firm reading, keeping the Fed in its 'higher for longer' stance. Any upside surprise could push back rate cut expectations.
- US CPI (April 12): Likely to show a reacceleration in headline inflation due to the energy shock. The Fed may remain cautious on further rate cuts.
- Chinese CPI (April 10): Expected to remain firm, supported by higher energy prices and improving domestic demand. A firmer inflation backdrop could reduce the urgency for near-term easing.
Geopolitical Tensions
- Trump's Iran Deadline (April 6): The US President's deadline for Iran to fully reopen the Strait of Hormuz remains in force. Failure to comply could risk US strikes on Iran's energy infrastructure. Markets will focus on any communication ahead of the deadline.
- OPEC+ (April 5): The OPEC+ JMMC and 'Voluntary Eight' are due to meet under severe conditions. The group must decide whether to proceed with a planned output increase or maintain/extend cuts. Focus will be on any shift towards coordinated emergency measures.
Other Key Events
- FOMC Minutes (April 5): The FOMC meeting minutes revealed a hawkish tone, with a narrow split in favor of a rate hike. The minutes strengthen the case for further tightening bias.
- BoJ Tankan Survey (April 1) : The survey showed continued strength in business sentiment, with inflation expectations rising to record levels. Market participants will focus on whether this reinforces expectations for a potential rate hike.
Personal Commentary
This week's events highlight the complex interplay between central banks, inflation, and geopolitical tensions. The Middle East conflict, in particular, is a wildcard that could have significant implications for global markets. I think the key takeaway is that central banks are walking a tightrope, balancing inflation risks with economic growth. The energy shock is a major concern, and its impact on inflation and supply chains will be closely watched.
What are your thoughts on this week's economic calendar? Do you think the Middle East conflict will have a lasting impact on global markets?
