Week’s main events April (20 – April 24)

The coming week promises to be a decisive period for global financial markets, as investors will simultaneously assess diplomatic developments in the Middle East and a flood of corporate and macroeconomic reports. The key factor remains the progress of negotiations between Washington and Tehran, as any signals of a long-term truce or the reopening of the Strait of Hormuz are instantly reflected in energy prices and risk appetite. The US corporate sector is entering the peak of earnings season, where results from giants such as Tesla, Intel, American Express, and Procter & Gamble will show how effectively large businesses are coping with rising costs and logistical disruptions. These figures will serve as a key indicator of the state of the US economy, alongside official retail sales data and the S&P Global PMI business activity indices, which are set to be released later this week. The global community will be paying close attention to the testimony of the new Fed Chair, Kevin Warsh, before Congress. In Europe and the UK, investors will focus on inflation data and PMI indices to gauge the region’s pace of adaptation to volatility in gas and oil prices. The Asian region will also provide important benchmarks: the People’s Bank of China (PBoC) will announce its decision on benchmark lending rates, which is critical for assessing the sustainability of China’s growth.

Monday, April 20

On Monday, the focus will be on Canadian inflation data and the People’s Bank of China’s decision. Canada’s Consumer Price Index (CPI) is a key factor influencing the Canadian dollar’s exchange rate. After an unexpected drop to 1.8% year-over-year in February, analysts expect inflation to jump to 2.5% year-over-year, but the Bank of Canada often places greater emphasis on the median figures, which are also expected to rise from 2.3% to 2.4%. Continued volatility in oil prices (with WTI trading around $90) could lead to an increase in the monthly figure as well. A reading exceeding the 2.0% target would signal that the Bank of Canada (BoC) will begin considering a rate hike, which could provide a boost to the Canadian dollar. However, markets are currently pricing in a 25-basis-point rate cut at the June meeting. The PBoC Loan Prime Rate (LPR) decision is expected to show no change, with the 1-year rate staying at 3.0% and the 5-year at 3.5%. Despite structural headwinds in the property sector, the Chinese central bank appears focused on currency stability and preventing yuan depreciation against a strong USD. Any unexpected cut would be a desperate signal for growth, potentially boosting the HK50 on stimulus hopes but weighing on the CNH.

Main events of the day:

– New Zealand Trade Balance (q/q) at 01:45 (GMT+3) – NZD (MED)
– China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3) – CHA50, HK50 (MED)
– Canada Consumer Price Index (m/m) at 15:30 (GMT+3) – CAD (HIGH)
– Eurozone ECB President Lagarde Speaks at 19:40 (GMT+3) – EUR (LOW)

Tuesday, April 21

On Tuesday, traders will focus on New Zealand’s inflation data, UK labor market reports, and the testimony of the new Fed Chair, Warsh, before Congress. During the Asian session, traders will assess New Zealand’s inflation data. This report is released quarterly, which amplifies the NZD’s reaction to the report. Inflation is expected to decline from 3.1% to 2.8% y/y, which could potentially put pressure on the NZD.

The UK labor market report is the top priority for traders dealing in the British pound. Following a period in which the unemployment rate rose to 5.2%, markets are watching for signs of a weakening “wage-price spiral.” Average wage growth is expected to slow to 3.6-3.8%. If wage data comes in below expectations, it will signal easing inflationary pressures, likely leading to a softening of expectations for the Bank of England and a weakening of the pound against the euro and the dollar. However, if the number of people claiming unemployment benefits unexpectedly declines, it would indicate tightness in the labor market, which could prompt the Bank of England to maintain its restrictive monetary policy for longer, boosting the GBP/USD pair. In the US, attention is focused on the remarks by Federal Reserve Chair nominee Kevin Warsh. His first public statements as a nominee for the Fed chairmanship could significantly shift interest rate expectations, particularly in the context of combating inflationary pressures caused by the conflict. If he reinforces his reputation as a proponent of deregulation and hints at a faster-than-expected rate cut to reach a “neutral” level, we could see a massive rally in US indices, but a potential decline in the US dollar.

Main events of the day:

– New Zealand Consumer Price Index (m/m) at 01:45 (GMT+3) – NZD (HIGH)
– UK Claimant Count Change (m/m) at 09:00 (GMT+3) – GBP (MED)
– UK Average Earnings Index (m/m) at 09:00 (GMT+3) – GBP (MED)
– UK Unemployment Rate (m/m) at 09:00 (GMT+3) – GBP (MED)
– Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3) – EUR (LOW)
– US Retail Sales (m/m) at 15:30 (GMT+3) – USD (MED)
– US Fed Chair-Designate Warsh Testifies at 17:00 (GMT+3) – USD (HIGH)
– US Pending Home Sales (m/m) at 17:00 (GMT+3) – USD (MED)

Wednesday, April 22

Wednesday is a high-stakes day for the British Pound and energy markets, as the impact of the Middle East conflict begins to materialize in hard data. The UK Consumer Price Index (CPI) is the day’s most critical release. After holding at 3.0% in February, the March data is expected to reflect the initial “war-driven” spike in energy and fuel costs, with some analysts forecasting a jump toward 3.3%-3.5%. A reading above 3.4% would likely force the Bank of England to abandon any remaining hopes of rate cuts in 2026 and could even push forward expectations for a June rate hike. This should provide immediate support for GBP/USD and GBP/JPY, though the upside may be capped by fears that such “cost-push” inflation will weigh heavily on UK consumer spending and GDP growth. In the energy sector, US crude oil reserves will be under intense scrutiny following a massive projected global inventory draw of 5.1 million bpd in Q2. If the EIA report confirms a significant drawdown in USUStockpiles despite the ongoing two-week ceasefire, it will signal that physical supply remains critically tight. Such a result would likely propel WTI Crude back toward the $100- $110 range, as the “risk premium” remains high.

Main events of the day:

– Japan Trade Balance (m/m) at 02:50 (GMT+3) – JPY (LOW)
– UK Consumer Price Index (m/m) at 09:00 (GMT+3) – GBP (HIGH)
– UK Producer Price Index (m/m) at 09:00 (GMT+3) – GBP (MED)
– US Crude Oil Reserves (w/w) at 17:30 (GMT+3) – WTI (HIGH)
– Eurozone ECB President Lagarde Speaks at 20:30 (GMT+3) – EUR (LOW)

Thursday, April 23

Thursday is “PMI Day,” a critical session for gauging the global economic pulse, alongside a major volatility catalyst for energy traders. The Eurozone and German Flash PMIs will be the primary movers for the EUR. Following a period of stagnation, markets are looking for the Services PMI to stay comfortably above the 50.0 expansion threshold. At the same time, the Manufacturing PMI remains the weak link, forecasted to struggle near 50.0-51.0. If the data shows a deeper-than-expected contraction in German manufacturing, it will likely drag EUR/USD lower, signaling that the ECB may need to prioritize growth over inflation.
In the US, the spotlight falls on Natural Gas Storage and the US Services PMI. With Natural Gas prices currently highly sensitive to seasonal storage shifts, a smaller-than-expected build (reflecting high export demand or late-season cooling) could trigger a sharp rally in XNG/USD. Meanwhile, the US Services PMI is expected to remain robust near 50.1. A “beat” here, combined with low Initial Jobless Claims, would bolster the USD, as it suggests the economy is still too hot for the Fed to consider near-term easing.

Main events of the day:

– Australia Manufacturing PMI (m/m) at 02:00 (GMT+3) – AUD (MED)
– Australia Services PMI (m/m) at 02:00 (GMT+3) – AUD (MED)
– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3) – JPY (MED)
– Japan Services PMI (m/m) at 03:30 (GMT+3) – JPY (MED)
– Singapore Consumer Price Index (m/m) at 08:00 (GMT+3) – SGD (MED)
– German Manufacturing PMI (m/m) at 10:30 (GMT+3) – EUR (MED)
– German Services PMI (m/m) at 10:30 (GMT+3) – EUR (MED)
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3) – EUR (MED)
– Eurozone Services PMI (m/m) at 11:00 (GMT+3) – EUR (MED)
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3) – GBP (MED)
– UK Services PMI (m/m) at 11:30 (GMT+3) – GBP (MED)
– US Initial Jobless Claims (w/w) at 15:30 (GMT+3) – USD (MED)
– US Manufacturing PMI (m/m) at 16:45 (GMT+3) – USD (MED)
– US Services PMI (m/m) at 16:45 (GMT+3) – USD (MED)
– Natural Gas Storage (w/w) at 17:30 (GMT+3) – XNG (HIGH)

Friday, April 24

Friday focuses on the “last mile” of global inflation trends and the resilience of the North American consumer amidst recent geopolitical shocks. The Tokyo Core CPI is the day’s premier event, serving as a leading indicator for Japan’s national inflation. Forecasts suggest a slight uptick toward 1.7%–1.8%. If the print exceeds the Bank of Japan’s 2.0% target, it will reignite speculation for a rate hike to 1.00% at the upcoming April 30 meeting. This would likely trigger a sharp deleveraging of the “carry trade,” providing significant bullish momentum for the JPY and potentially weighing on the Nikkei 225 (JP225) as yen strength impacts exporters. In the US, the Michigan Consumer Sentiment (Final) will be scrutinized for changes in inflation expectations. Preliminary data showed a sharp drop to 47.6 and a spike in one-year inflation expectations to 4.8% due to the Iran conflict. If the final reading shows any further deterioration in sentiment or a rise in long-term inflation expectations, this would likely support the USD as a safe haven and keep pressure on US Treasuries, while creating a volatile environment for XAU/USD as gold balances its roles as an inflation hedge and a non-yielding asset facing high interest rates.

Main events of the day:

– Japan Tokyo Core CPI (m/m) at 02:30 (GMT+3) – JPY (MED)
– UK Retail Sales (m/m) at 09:00 (GMT+3) – GBP (MED)
– Switzerland SNB Chairman Schlegel speaks at 11:00 (GMT+3) – CHF (LOW)
– German IFO Business Climate (m/m) at 11:00 (GMT+3) – EUR (LOW)
– Canada Retail Sales (m/m) at 15:30 (GMT+3) – CAD (MED)
– US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3) – USD (MED)

by JustMarkets, 2025.04.20

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