Below are the most important global events likely to affect FX and bond markets in the week starting April 7.
U.S. President Trump’s announcement of steep and sweeping tariffs on imports from countries across the board sparked a huge fall in equities and bond yields and a drop in the dollar as investors anticipate that the U.S. economy will be hit hard.
Focus will center on the University of Michigan’s consumer sentiment survey, while inflation data could offer clues on prospects of interest-rate cuts to support the economy. Federal Reserve minutes will also be released.
In Asia, China’s latest factory and consumer price data will offer key insights into the effectiveness of government efforts to stimulate domestic demand. Central bank decisions in New Zealand, India and the Philippines will be closely watched as a new era of trade protectionism unfolds.
U.S.
U.S. economic data in the coming week will offer a snapshot of how robust the economy was in the run-up to Trump’s tariff announcements. Economic growth is expected to suffer a significant hit from the tariffs, alongside risks of higher inflation.
“Dark clouds are building over the U.S. economy as President Trump’s new trade regime raises fear over higher prices and weaker economic activity,” ING economist James Knightley said in a note.
“Sharply higher tariffs, borne by the importing company, risk squeezing profit margins and prompting weaker consumer spending power at a time when fears over potential joblessness are increasing and equity markets are sliding.”
In that context, expectations are building that the U.S. Federal Reserve will provide a boost to the economy by cutting interest rates. U.S. money markets are pricing in a substantial 111 basis points of rate cuts by year-end, according to LSEG data, having priced in as few as one or two early this year. A first rate cut is fully priced in for June.
Fed minutes for the latest meeting, due Wednesday, could give clues on how realistic these expectations are.
“We will be looking for more detail on the discussion between committee members over whether potential tariffs will result in a one-off price increase (their reported base case), or a longer lasting one,” Investec economist Ellie Henderson said in a note.
Thursday’s consumer-price inflation data for March will also be a key indicator to watch, alongside producer-price data Friday, April 11, for investors looking to gauge the interest-rate outlook.
Another elevated inflation reading could make policymakers cautious about cutting rates, at least for now.
Various surveys recently have suggested that consumer sentiment had already taken a substantial hit even before the latest tariffs were announced. The University of Michigan’s preliminary survey for April should give a snapshot of the extent to which tariffs have impacted consumer sentiment.
Consumer confidence “could lurch even lower in the wake of recent developments,” ING’s Knightley said.
The Treasury will auction $58 billion in three-year notes on Tuesday, $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday.
EUROZONE
Investors will continue to assess the potential impact on the eurozone economy from Trump’s tariffs and look out for any potential announcements of retaliatory measures.
Still, next week remains light for the eurozone economic calendar.
German foreign trade and industrial production data are due Monday, along with eurozone retail trade data. Italian industrial product data is due Thursday. On Friday, April 11, second-estimate German and Spanish CPI data will be released.
German economic research institutes’ joint economic forecast on Thursday could receive elevated attention in light of the country’s fiscal expansion plans as well as U.S. tariffs.
Germany will launch a new February 2035-dated green Bund at an auction on Tuesday, offering 3 billion euros. The new Bund is a twin of the nominal February 2035 Bund.
The Netherlands and Austria will hold an auction on Tuesday, while Portugal will do so on Wednesday, Spain on Thursday and Italy on Friday, April 11.
U.K.
U.K. gross domestic product data for February are due Friday, April 11, and could show an improvement after a weak January.
“The U.K. government is substantially ramping up spending this year, and that will keep growth supported–though weaker activity in the U.S. and the eurozone threatens to become a major headwind later this year and into 2026,” ING’s James Knightley said.
Industrial production data for February are also due Friday. Halifax’s house price index for March is released Monday.
The U.K. is due to auction July 2054 gilts on Tuesday and March 2030 gilts on Wednesday.
SCANDINAVIA
Sweden and Norway will hold bond auctions on Wednesday.
SWITZERLAND
Switzerland will hold its monthly bond auction on Wednesday.
CHINA
China reports inflation data for March on Thursday, offering a view into price trends amid persistent deflationary pressure.
Economists broadly expect consumer inflation to have climbed out of negative territory, while producer prices likely remained in contraction.
February’s inflation data highlighted the challenge policymakers face in stimulating demand and consumption. Markets will be watching for potential stimulus measures, particularly in response to the latest U.S. tariffs. Officials have vowed strong countermeasures and pledged additional economic support.
Signs of deflation could heighten expectations for monetary easing, though renewed weakness in the yuan may limit space for rate cuts. Tariff concerns have weighed on the currency, and traders will be watching to see whether the central bank steps in to support the yuan or allows further depreciation.
JAPAN
The Bank of Japan will hold a branch managers meeting on Monday, alongside a quarterly report on regional economies. The report may shed light on whether wage increases are becoming a nationwide trend and how businesses are coping with inflation and global uncertainties.
On Wednesday, BOJ Governor Kazuo Ueda is set to speak at an event hosted by the Trust Companies Association of Japan. Markets will parse his remarks for any signals on the timing of the next interest rate hike.
Key economic data this week includes February’s current account balance on Tuesday, and March’s bank lending figures on Thursday.
The Ministry of Finance will auction 800 billion yen in 30-year Japanese government bonds on Tuesday, and 2.4 trillion yen in five-year sovereign notes on Thursday. Life insurance companies and pension funds are expected to show bidding interest in the 30-year JGB auction, given anticipated high yields.
AUSTRALIA/NEW ZEALAND
In Australia, a Thursday speech by Reserve Bank of Australia Governor Michele Bullock will take on greater significance amid growing concerns of a global slowdown, fueled by escalating trade tensions.
With financial markets under pressure, Bullock may be asked how the RBA plans to respond to weakening international growth and its risks to Australia.
She may also face questions about why the RBA didn’t consider an interest-rate cut at this month’s policy meeting, despite rising concerns over a potential U.S. and global recession. With seven weeks until the next policy-setting meeting, there’s increasing risk that the central bank has been slow to react to the global market selloff.
Some local banks are already speculating about a possible 50-basis-point cut to the official cash rate in May, while others now anticipate more cuts this year than they did just weeks ago.
Meanwhile, the Reserve Bank of New Zealand will hold its policy meeting on Wednesday, facing similar scrutiny over its response to the global turmoil.
The RBNZ is expected to cut its key policy rate by another 25 basis points in line with its recent guidance, but its assessment of global risks may carry even more weight for traders.
INDIA
India’s central bank meets Wednesday against a backdrop of market volatility and heightened concerns over sharply higher U.S. tariffs.
Expectations for a rate cut–the second in the Reserve Bank of India’s current easing cycle–have grown as inflation cools and growth slows.
U.S. President Trump’s latest tariffs could weigh on India’s exports and the broader economy, bolstering the case for further policy easing. Citi analysts now anticipate three more 25-basis-point cuts this year and have lowered their full-year real GDP growth forecast to 6.1%.
Goldman Sachs strategists also anticipate more monetary easing, citing limited fiscal space given the government’s commitment to fiscal consolidation. They have lowered their growth forecast and see risks of further downgrades depending on how tariff negotiations unfold.
India has signaled it has no plans to retaliate on tariffs and is preparing to negotiate a trade deal with the U.S.
Markets will be watching for any revisions to the RBI’s economic forecasts and comments on the rupee’s depreciation.
PHILIPPINES
The Philippines’ central bank will announce its rate decision on Thursday, which is widely expected to be a cut, after it held steady in February due to global trade uncertainty.
Before its pause in February, BSP had been steadily easing policy since August.
March’s headline CPI of 1.8%–below the central bank’s 2.0%-4.0% target–“seals the deal” for a rate cut, Barclays economist Shreya Sodhani wrote in a note, adding that U.S. tariffs will likely be “growth-negative and deflationary.”
However, UOB economists expect BSP to hold for now, assessing the real impact of U.S. tariffs and global trade risks. Still, a rate cut remains possible “should the central bank shift its focus to domestic growth momentum due to heightened external risks with contained inflation expectations,” UOB said.
TAIWAN
Taiwan will release March inflation and trade data on Tuesday and Thursday, respectively.
(MORE TO FOLLOW) Dow Jones Newswires
04-06-25 1714ET
