EUROPEAN SESSION
In the European session, the main highlight will be the German inflation data. We will get first the German states figures which generally give clues on the national CPI data. The national CPI is essentially a weighted average of the states.
Having said that, inflation is expected to increase substantially in March due to elevated energy prices, so it’s not going to be a surprise at all. The ECB will likely look through the March inflation spike but might also lay the groundwork for a rate hike in June if the US-Iran war and the supply disruptions continue.
The market is pricing a 55% chance of a rate hike in April and 86% in June. The total tightening expected by year-end is 72 bps.
German HICP Y/Y
AMERICAN SESSION
In the American session, the main highlight is Fed Chair Powell’s speech. He’s unlikely to deviate much from the last FOMC press conference though. We have already gotten some meaningful tightening in financial conditions, which could slow or even avoid second round effects, so there’s no need for him to do anything just yet.
CENTRAL BANK SPEAKERS
- 14:30 GMT/10:30 ET – Fed Chair Powell (neutral – voter)
- 20:00 GMT/16:00 ET – Fed’s Williams (neutral – voter)
