FX Week Ahead: Inflation, UK Jobs In Focus

The second week of April will see the inflation theme taking over the markets with data expected from the U.S., China, and the UK. Inflation in the U.S. and the UK is expected to rise at a slower pace, while consumer prices in China are expected to accelerate at a pace of 1.1%, following a 0.8% increase previously.

Fed chair, Janet Yellen is due to speak on Monday which could be the main event risk for the markets. Overall, the week ahead is likely to remain quiet with the focus mostly on the UK jobs while on the central bank meetings, the Bank of Canada is expected to keep interest rates steady. Here’s a quick preview of this week’s events.

U.S. Inflation and Retail Sales

The coming week will see the release of the monthly consumer price index data for the month of March. Economists surveyed are expecting a flat print in inflation while the core CPI is expected to rise 0.2% from February.

U.S. Inflation rate YoY: 2.7% (Feb 2017)

The main consensus for lower inflation this month is expected to come on the back of lower energy prices.

On a year over year basis, consumer prices are expected to rise 2.3% on the core while the headline consumer prices are expected to rise 2.8%. Despite the inflation figures likely to impact the markets, the Fed will be watching the PCE core inflation figures.

Retail sales figures are also expected to be released this week for March. In February, core retail sales rose 0.2% while headline retail sales rose 0.1% in February. The decline in retail sales came on the delayed tax refunds which were pending.

This is expected to pick up in March following the tax refund payments which is expected to give a boost to retail spending.

Besides the inflation and retail sales figures, Fed Chair Janet Yellen is expected to speak on Monday at the University of Michigan where she will also take audience questions.

Eurozone Sentix Investor Confidence

The Eurozone Sentix investor confidence is forecast to show a reading of 20.1, slightly lower than 20.7 registered in March. The Sentix index touched a 10-year high in March with investors giving a favorable view of the current situation.