As we get into the new day, broader markets are fearing that Trump might not be taking a targeted approach on tariffs come 2 April. That follows from this latest report here. Liberation Day is set to be the most important event in markets this week as we will get an idea of what sort of trade policies and tariffs that Trump wants to dish out.
That being said, it's not going to be the only thing that could move markets this week. Let's take a step back and weigh the other things in play in the next few days.
The first one is obviously the US jobs report on Friday. The non-farm payrolls report is going to be a notable one, with estimates showing an expected slowdown in employment growth to 128k in March - down from 151k in February.
But as was the case last month, the big thing to watch is how much impact from DOGE-related layoffs will show up in the data. That's still an interesting quandary that could sway broader markets depending on what we see from the numbers at the end of this week.
Besides that, we also will have Eurozone inflation numbers tomorrow. And teeing that up will be the German inflation numbers today. The market pricing has grown increasingly convinced that the ECB will cut rates in April. That is of course largely thanks to Trump's tariffs, with the latest one on German autos especially being a standout.
So, the inflation figures tomorrow could seal the deal on a rate cut. But the medium-term outlook for the ECB is definitely going to be more complicated in the months ahead. Germany's spending package has the potential to stir up inflation and that's something the central bank has to watch out for going into next year.
For now, the immediate focus will be quite straightforward. However, it doesn't mean that the ECB will have an easy path following the likely rate cut in April.
Sticking with central banks, there's also the RBA monetary policy decision tomorrow to work through. Traders are not expecting a rate cut just yet but this latest shocker in terms of labour market data has definitely raised the odds of a less hawkish tone by the central bank.
The RBA delivered a hawkish cut in February here but it looks like they might have to change their tone now before moving into May.
This article was written by Justin Low at www.forexlive.com. Read More Details
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