The first half of the week started mildly positively as markets awaited the US CPI print on Wednesday. The headline CPI print showed a drop lower, below the market’s minimum expectations, to 5%, but US rate pricing was not changed dramatically. However, lower US inflation should be supportive for stocks and gold as we head into the end of April. Friday’s earnings are in key focus as the US bank JPMorgan announces its earnings before the US open. Investors are very keen to know whether or not there has been another flight of deposits from US banks as worry over US banks lingers.

Other key events from the past week

  • US CPI: Inflation focus, April 12: Markets expected the headline to fall to 5.2% from 6% prior for March. In fact, the headline fell to 5% y/y, but the core remains sticky at 5.6% y/y. On the face of it, this is good news, but will the Fed keep hiking as its target is still at 2% which is far away from this month’s print.
  • BoC interest rate decision: No change, April 12: Interest rate markets expected a 95% chance of an unchanged decision & the BoC did leave rates unchanged at 4.50%. The CAD inflation print next week will be important.
  • Earnings: JPMorgan, April 14: Many analysts are concerned about the level of deposits withdrawn from US banks at the start of 2023. Investors will be watching JPMorgan’s earnings closely for any further signs of falling deposit levels.

Key events for the coming week

  • GBP: UK inflation, April 19: Headline inflation is expected to fall to 10.2% y/y for March from 10.4% in February. The Bank of England will want to see inflation falling after last month’s surprise uptick. Another high inflation print and there will be further expectations of UK interest rates remaining high.
  • Seasonal Insights: JPMorgan announces earnings on Friday before the US Open.
  • EUR/USD: European PMIs, April 21: Eurozone PMIs are released on Friday and markets will be watching the services reading closely. A reading of 53.2 is expected, down from 53.7 in April. If the reading comes in unexpectedly lower watch out for potential EURUSD weakness. Data starts with France at 08:15 BST.

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