European markets are set for a steady open today, with investors focused on the upcoming European Central Bank (ECB) meeting and key economic data releases. While the ECB is widely expected to keep interest rates on hold, there is a strong likelihood of a rate cut in June, with further cuts expected later this year.
Market participants will be closely watching the tone and commentary from ECB officials for clues on the timing of the cut. Investors are also preparing for the release of the US consumer price index (CPI) report on Tuesday, April 10, which could show core inflation decelerating slightly to 3.7% in March from 3.8% in February. The data is important because it could shed light on the Federal Reserve’s timing for starting its rate-cutting cycle. Rate-cut expectations have shifted from March to late September following strong US jobs data.
Meanwhile, US Producer Price Index (PPI) data and the minutes of the US Federal Reserve's March meeting will also be closely scrutinized this week, providing further insight into the central bank's policy direction. In addition, speeches from Federal Reserve officials, including John Williams, Mary Daly and Raphael Bostic, are scheduled throughout the week, which could influence market sentiment.
The STOXX 600, a key gauge of European market performance, will be in focus after hitting a two-week low on Friday. Investors remained cautiously optimistic as rising US Treasury yields bolstered the dollar, while stocks also gained. However, it remains uncertain whether the positive sentiment toward risk assets will continue amid the narrative of higher US interest rates.
In a development that could boost risk appetite, a media report suggested progress in ceasefire talks in the Gaza conflict, with the parties reportedly agreeing on the basics during talks in Cairo. Further economic events that could impact markets include the release of Germany’s trade balance, industrial production and import-export data for February. As the week progresses, the global financial community will be closely monitoring these developments to assess the potential impact on markets and investment strategies.
Source: Investing
