EUROPEAN SESSION
In the European session, we don’t have much on the agenda other than the Spanish retail sales data which is not going to change anything for the ECB, so the market reaction will be muted.
In fact, the market focus right now is solely on the US-Iran war because that’s going to influence the economic data in the future. The data we are getting now is pre-war and therefore old news.
ECB policymakers continue to stress patience, so don’t expect much from next week’s policy decision other than the same old stuff served with some words of caution on energy prices.
AMERICAN SESSION
In the American session, the main highlight will be the US CPI report. The CPI Y/Y is expected at 2.4% vs 2.4% prior, while the M/M figure is seen at 0.3% vs 0.2% prior. The Core CPI Y/Y is expected at 2.5% vs 2.5% prior, while the M/M measure is seen at 0.2% vs 0.3% prior.
US Core CPI Y/Y
Given the focus on the war, the market will likely shrug off a soft report since the data is already seen as old news. On the other hand, a hotter-than-expected report could trigger some risk aversion, as investors might worry that if inflation was already picking up before the war began, higher oil prices could make it even worse going forward.
CENTRAL BANK SPEAKERS
- 08:30 GMT/04:30 ET – ECB’s de Guindos (neutral – voter)
- 12:30 GMT/08:30 ET – Fed’s Bowman (dovish – voter)
- 15:00 GMT/11:00 ET – ECB’s Schnabel (hawkish – voter)
