5 world market themes for the week ahead
Bank that a June rate cut is really coming, though oil is on the rise again, clouding the inflation picture — and giving policy makers in Canada, New Zealand and Korea food for thought.
China gears up to release a deluge of key data and U.S. banks kick off the earnings season.
1/ SEEKING THE GREEN LIGHT
The European Central Bank meets on Thursday in what is likely the final hurdle before it starts cutting interest rates.
Traders see a nearly 100% chance of a 25 basis-point cut in June, so a green light is crucial to uphold market sentiment. A flurry of policymakers have explicitly signalled June as the date of a first move. Even Austria's uber-hawk governor Robert Holzmann is not opposed.
Data showing inflation falling unexpectedly to 2.4% in March should give the ECB further confidence.
So the ECB is very likely to signal rate cuts are coming.
The question is how explicit policymakers will be about June, given they want to review first-quarter wage growth figures that will be released in May.
2/ A CRUDE CIRCLE
Rising geopolitical turmoil and supply disruption in a number of production hot-spots are pushing oil prices back towards $90 a barrel for the first time in months.
Central banks tend to focus on so-called core measures of inflation that strip out energy and food prices. But for businesses on the ground, there's no taking the crude price out of the equation. And the assumption that the U.S. Fed might cut rates by less than its peers has pushed the dollar up almost across the board this year.
That
