In the European session, we will get the inflation reports for Switzerland and Eurozone. The Swiss CPI Y/Y is expected at -0.1% vs 0.0% prior. The market is pricing a 32% chance of a 50 bps cut at the upcoming SNB meeting. A miss should increase the expectations for the larger cut but might not become the favoured option yet unless we get much lower than expected figures.
The Eurozone CPI Y/Y is expected at 2.0% vs 2.2% prior and the Core CPI Y/Y is seen at 2.5% vs 2.7% prior. The market is pricing a 95% chance of a 25 bps rate cut this week with another one to follow before year-end. The ECB speakers have made it pretty clear that they are going to cut in June and then pause until at least September before thinking about the next action.
In the American session, we have the April US Job Openings data which are seen at 7.100M vs 7.192M prior. This is when Trump imposed his aggressive reciprocal tariffs and then paused them a week later. Therefore, the expectations are skewed to the downside for the report but it shouldn’t change much given that it’s old news now.
Central bank speakers:
- 09:15 GMT/05:15 ET – BoE’s Bailey (neutral – voter)
- 16:45 GMT/12:45 ET – Fed’s Goolsbee (neutral – voter)
- 17:00 GMT/13:00 ET – Fed’s Cook (dove – voter)
- 19:30 GMT/15:30 ET – Fed’s Logan (neutral – non voter)
This article was written by Giuseppe Dellamotta at www.forexlive.com.
