LONDON -U.S. inflation numbers lit a fuse under world markets and forced a sharp re-think on U.S rate cut bets, so data and earnings should keep traders nervy as they stay alert to possible Japanese intervention on the yen and geopolitical tensions.
That puts the U.S. consumer into sharper focus with retail sales data due on April 15 and a slew of corporate earnings. March retail sales likely climbed 0.3%, a Reuters poll of economists showed. That follows a lower-than-expected 0.6% rise in February that suggested a slowdown in consumer spending amid rising inflation and high borrowing costs.
The devil is in the detail. Granted, there are some green shoots from upbeat manufacturing and services surveys to rising consumer prices, but persistent producer price deflation points to a shaky recovery.An ailing property market remains a drag - it's hard to write off a sector that once accounted for over a quarter of GDP.India, the world's largest democracy by population, starts voting from April 19 in national elections to be held in seven phases until June 1.
India's benchmark stock indexes Nifty 50 and Sensex as well the broader, domestically focused mid-caps are at record highs, helped by sustained domestic inflows and a strong economic outlook. A NDA loss, viewed as a low-probability, could trigger a pull back.British inflation has slowed, putting the Bank of England on track to start cutting rates from 16-year highs. Attention turns to Wednesday's March consumer prices data to confirm the trend.
Traders, who had played with the idea of a June rate cut, now expect easing to start in August. Some of that repricing is related to the pull-back in U.S. rate-cuts bets.Finance ministers and central bank governors across the world descend on Washington, DC, for the annual Spring Meeting of the IMF/World Bank, starting Monday.