Week ahead: Investors look for rate cut clues on both sides of the Atlantic
Markets will be closely watching key economic releases in the US and Europe this week, which will offer clues on the likelihood of near-term interest rate cuts.
The corporate calendar is quiet this week as earnings season has largely come to an end.
On Friday, investors will digest US jobs figures for March, which will fuel debate on whether the country is on course for a “soft” economic landing in its battle against inflation.
Last month’s non-farm payrolls data showed the US economy added 275,000 jobs in February, beating forecasts of around 200,000 – but with sharp downgrades to previous figures.
Downgrades to February’s bumper figure this week could complicate the outlook for the US economy and the timeline for interest rate cuts from the Federal Reserve.
The US figures will be preceded by Eurozone flash inflation data for March on Wednesday which will influence markets’ bets on when the European Central Bank will cut interest rates.
The Bank has signalled that it is likely to wait until the summer to start cutting rates, with headline inflation dropping less than expected to 2.6 per cent in February.
Eurozone inflation is only forecast to slow slightly to 2.5 per cent in March, which would give policymakers little reason to move their plans forward. Traders are currently betting on a cut in June.
In other news, former US president Donald Trump will this week reach his court-mandated deadline to post a reduced $175m (£139m) bond in his civil fraud case in New York.
Trump gained a fortune on paper last week following his social media company’s Nasdaq debut but is not able to sell his shares for six months.
UK veterans’ minister Johnny Mercer has until Wednesday to reveal to a public inquiry the names of people who told him about allegations of a cover-up of war crimes in Afghanistan by British special forces, or else face a possible prison sentence.
Other noteworthy data releases this week include UK mortgage approval figures for February on Tuesday and the Halifax house price survey on Friday.