Slowdown And Inflation Nerves To Be Tested; BoJ meets
XM Group | Apr 22, 2022 07:30AM ET
Euro hoping for inflation and Macron boost
Inflation in the euro area hit the highest on record in March, jumping to 7.4% year-on-year. It is expected to have heated up further in April when the flash estimates are released on Friday. The preliminary readings on GDP growth in the first quarter are also out the same day. The Eurozone economy likely notched up moderate growth over the period, but investors will be sensitive to any unexpected weakness given the dimmed outlook for the rest of the year.
Policymakers have only recently started to flag that a rate hike could be imminent, with markets fully pricing in a 25-basis-point increase in June. If the inflation numbers are much higher than expected, speculation of a rate hike as early as the May meeting could gather steam, boosting the Australian dollar.
However, even if there is a strong case for a move in May, the RBA will probably want to avoid taking any action before the federal election that’s been set for May 21.
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