This week, traders are closely watching the release of the UK Consumer Price Index data for March. Forecasts suggest that annual inflation will rise from 2.8% in February to 3.2% in March, while core inflation may ease slightly from 3.5% to 3.3%.

High inflation levels (above 3%) continue to pose a significant challenge for the Bank of England in moving forward with interest rate cuts. Still, a 25-basis point cut is expected at the Bank’s May meeting. Some market participants are even calling for a 50-basis point cut to help support the economy amid ongoing uncertainty caused by President Trump’s sweeping tariffs announced on April 2, which could lead many businesses to delay strategic decisions. Notably, the Trump administration imposed a 10% tariff on imports from the UK.

Traders are also awaiting the Bank of Canada’s interest rate decision this week. The BoC lowered rates by 25 basis points at its last meeting in March. With Canadian inflation still hovering near the 3% mark and no new tariff threats against Canadian goods, the Bank is expected to keep rates unchanged in April. This aligns with recent remarks from the Bank of Canada Governor, who emphasized that interest rates would be set according to the risks facing the Canadian economy.

Meanwhile, attention is turning to the European Central Bank’s (ECB) interest rate decision before the end of the week. Initially, markets were divided over whether the ECB would pause or continue cutting rates in April. However, following the introduction of U.S. tariffs, expectations have shifted. Markets are now pricing in a seventh consecutive 25 basis point cut at the April meeting, with another potentially coming in June. These expected cuts are aimed at supporting economic growth, which is likely to be impacted by the newly imposed tariffs. With the latest inflation data for March showing a headline rate of 2.3% and core inflation at 2.4%, the ECB may feel it has enough room to prioritize growth over inflation in the near term.

Economic Data Highlights (UAE time)

Monday 14th of April  

• CHF- Producer Price Index (Mar)
• OPEC monthly report
• Fed Waller speaks

Tuesday 15th of April  

• Fed Bostic speaks
• Reserve Bank of Australia minutes
• GBP- Employment, Wages and Unemployment Rates (Feb)
• EUR- Zew Economic Sentiment (Apr)
• CAD- Consumer Price Index (Mar)

Wednesday 16th of April  

• CNY- Gross Domestic Product (Q1)
• GBP- Consumer Price Index (Mar)
• EUR- Consumer Price Index (Mar)
• USD- Retail Sales (Mar)
• Bank of Canada Rate Decision and Press Conference
• US Oil Inventories
• Fed Chair Powell speaks

Thursday 17th of April  

• NZD- Consumer Price Index (Q1)
• AUD- Employment, Wages and Unemployment Rates (Apr)
• ECB Interest Rates Decision & Press Conference
• USD- Housing data (Mar)

Friday 18th of April

• Bank holiday in the EU, UK & US (Good Friday)