![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-101.png\")
<\/figure>\n\n\n\nGBP \u2013 Financial data dispersed throughout the week<\/h2>\n\n\n\n
The pound is about to end the week unchanged against the USD, stronger against the JPY and weaker against the common currency. On a monetary level, we note the market\u2019s expectations for BoE to start cutting rates in its August meeting and deliver two cuts in total for the year. BoE Governor Bailey\u2019s statements over the past few days may have enhanced the prospect for rate cuts as he stated that he expects a strong drop of inflation in the UK economy in May. The comments tended to highlight the possibility of a rate cut possibly earlier than August. On the flip side, BoE policymakers Haskel and Greene seemed to cation the markets against any possible premature rate cuts thus burring the monetary policy outlook somewhat. On a fundamental level, we note that UK finance minister Hunt in statements he made in the past few days seemed to lean more on the expansionary side for the UK Government\u2019s fiscal policy. The comments tended to touch not only the possibility of more rate cuts but also higher spending, especially for defence. Overall further signals for an expansionary fiscal policy may provide support for the pound. On a macroeconomic level, we have a number of releases from the UK in the coming week, yet we note the release of UK\u2019s preliminary PMI figure for the services sector, given that the expansion of economic activity in the sector is key for the UK economy\u2019s growth.<\/p>\n\n\n\n JPY is about to end the week lower against the USD, the EUR and the GBP, in a sign of wider weakness. Overall we have to note that the Japanese currency is quite weak, which may prompt the Japanese Government to intervene in the markets in support of JPY. Yet should the JPY\u2019s weakness be caused by BoJ still rather loose monetary policy then the effect of a possible market intervention by the Japanese government may prove to be only temporary. On a fundamental level, we note JPY\u2019s dual nature as a safe haven and a national currency. Hence should we see tensions and uncertainty on an international level being enhanced we may see JPY gaining some inflows. Yet in our opinion in the past few days, we see the interest rate differential and outlook being possibly the main issue weighing on the JPY. Hence we highlight the release of BoJ\u2019s interest rate decision next Friday as the highlight of the week for JPY traders. The market is widely expecting the bank to remain on hold and currently JPY OIS implies a probability of 89.3% for such a scenario to materialise. Yet the market is expecting the bank to proceed with two rate hikes in the year. Should the bank remain on hold as expected, we may see market attention turning towards the release of the accompanying statement and the forward guidance included in it. We note that comments of BoJ policymakers in the past days, including BoJ Governor Ueda seem to caution the markets that the bank may maintain a more accommodative stance for the Japanese economy. Thus, should the bank, maintain a more dovish stance as we expect we may see the Yen weakening, as JPY traders may be somewhat disappointed, yet at the same time may also contradict the market\u2019s expectations and thus could weigh on the JPY.<\/p>\n\n\n\n The common currency is about to end the week, halting its drop against the USD. Nevertheless, the EUR seems to end the week in the greens against the JPY and to a lesser extent against the GBP. On a monetary level, we note that ECB President Lagarde seemed to be leaning more on the dovish side as she stated that the bank may cut rates soon. The signals became even clearer as Germany\u2019s Buba President and ECB Policymaker Nagel was reported stating that a June rate cut seems to be increasingly likely. Overall the bank may start cutting rates systematically first among major central banks and should we see more ECB policymakers, stressing such a scenario we may see the EUR losing ground against its counterparts as the interest differentials may widen against the EUR. On a fundamental level, we note that the Iranian and Israeli strikes tend to worry EUR traders, maybe a bit more than others as a possible escalation may have an adverse effect on the EUR area on a fundamental level. Please note that also the war in Ukraine is an ongoing factor of uncertainty for the area. On a macroeconomic level, we turn our attention towards economic activity and we highlight the release of the preliminary PMI figures for April. The problem child of the Zone remains Germany\u2019s manufacturing sector which suffered a continuous contraction of economic activity. On the other hand, it seems that other countries in the block are countering the losses of economic activity for Germany.<\/p>\n\n\n\n AUD is about to end the week lower against the USD. On a monetary level, we note the Aussie\u2019s sensitivity to the market sentiment given its riskier nature as a commodity currency. Should the market\u2019s stance be more cautious in the coming week we may see the Aussie losing some ground on a fundamental level. Also on a fundamental level, we note the close economic ties of Australia and China and AUD\u2019s sensitivity to developments in the Chinese economy. On a macroeconomic level, we note that China\u2019s GDP rates were better than expected, which may have provided a boost of confidence for AUD traders. Yet on the flip side, we note the worsening Australian employment data for March with the employment change figure falling in the negatives and the unemployment rate ticking up. The release seems to be adding more pressure on RBA to start cutting rates. In the coming week, we highlight the release of Australia\u2019s CPI rates for March and Q1. Should the CPI rates slow down even further, we may see even more pressure on RBA to start cutting rates. For the time being, we note that the market does not expect the bank to start cutting rates in 24. Should such expectations be enhanced in the coming week, we may see the Aussie getting some support on a monetary level.<\/p>\n\n\n\n The CAD is about to end the week slightly stronger against the USD. On a fundamental level, we note that the CAD could get some support should the market sentiment be more risk-oriented. Also, the direction of the CAD could be influenced by the path of oil prices. Oil prices are about to end the week in the reds and the main factors behind its movement may include also the conflict in the Middle East and a possible flare up could cause oil prices to rally. Overall the supply side of the international oil market seems to remain tight while there are hopes for a robust demand side in the oil market. Overall should oil prices start rising again, we may see the CAD getting some support as well. On a monetary level, we note the market\u2019s expectations for BoC to start cutting rates from July onwards and deliver two rate cuts in total within the year. Yet as per BoC Governor Macklem\u2019s comments, the bank seems to want inflationary pressures to ease further before starting to cut rates. Please note that at the release of the CPI rates for March, the market got some mixed signals, as the headline rate ticked up while the core rate ticked down. Yet we have to note that the CPI rates, both on a headline and a core level, are within the bank\u2019s inflation target of 1%-3%. Hence on a macroeconomic level, we note the release of the retail sales growth rate for February on Friday and the PPI rates for March on Monday. Other than that we would expect fundamentals to lead the Loonie in the coming week.<\/p>\n\n\n\n We tend to expect volatility in the FX market to ease in the coming week, given that the gravity and frequency of financial releases tends to ease. We may also see the USD relenting some of the initiative to other currencies in the FX market. As for US equities we note that the wider fundamental uncertainty in the markets in conjunction with the possibility of the Fed maintaining rates high for longer weighed and forced major US stock market indexes to end lower for a second week in a row. Furthermore, we note that the earnings season is in full swing. In the coming week, we intend to focus on the high-tech sector and note the earnings releases of Intel (#INTC), Microsoft (#MSFT), Google (#GOOG), Tesla (#TSLA), Meta (#META), IBM (#IBM), Amazon (#AMZN) among others. On the other hand, gold\u2019s price was able to rise again and is about to be in the greens for a fifth week in a row. It should be noted that the negative correlation of the USD with gold\u2019s price was not present in the current week, as Market uncertainty seems to be providing support on both trading instruments, while gold benefits more given the high amount of purchases of gold by central banks, especially the People\u2019s Bank of China.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-102.png\")
<\/figure>\n\n\n\nJPY \u2013 BoJ \u2018s interest rate decision eyed<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-103.png\")
<\/figure>\n\n\n\nEUR \u2013 Preliminary PMI\u2019s in focus<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-104.png\")
<\/figure>\n\n\n\nAUD \u2013 CPI rates to move the Aussie<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-105.png\")
<\/figure>\n\n\n\nCAD \u2013 Fundamentals to lead the Loonie<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2024\/04\/image-106.png\")
<\/figure>\n\n\n\nGeneral Comment<\/h2>\n\n\n\n