Investors and traders should brace themselves for a volatile week ahead, as central bank meetings and economic data releases are expected to dominate the financial markets. This week will feature events such as the Bank of Japan’s interest rate decision, German preliminary CPI, the US’s advance GDP, and the University of Michigan’s revised consumer sentiment index. The market’s reaction to these releases could significantly impact global currencies and financial instruments. As such, traders and investors are advised to stay updated with the latest news and developments in the coming days.
The British pound hit a new high last week, but the question remains whether it can maintain its momentum going forward. The release of UK GDP and Industrial Production data, Bank of England Governor Bailey’s scheduled speeches, and Public Sector Net Borrowing data could offer insights into the central bank’s stance on monetary policy and the health of the UK economy. While Bloomberg analysts are projecting a terminal rate of 5% for the Bank of England, there are concerns over the drop in retail sales in March, which could lead to “stagflation” in the UK economy. The market’s reaction to this data could determine the value of the pound and whether the “interest rates are going higher” narrative takes hold.
Eurozone Retail Sales data, which is set to be released on Tuesday, could support the European Central Bank’s hawkish path, as Eurozone Core CPI rose to 5.7% last week. ECB’s Muller’s recent statement that the central bank has “room to raise rates” has further bolstered euro bullishness. However, the collapse of Credit Suisse has raised concerns about confidence in Europe’s banking sector. The market’s reaction to this data could also determine whether EURUSD’s positive sentiment can continue into April and test resistance at 1.1035. Additionally, traders will be closely watching the US’s Advance GDP and Core Personal Consumption Expenditure data releases, which could create volatility at the end of the month.