Stock Market And Week Ahead: U.S. CPI, Retail Sales, ECB, BoC, RBNZ Rate Decisions

Stock Market 

An important trading week is here. Traders are likely to be on the edge because we have the US banks kick-starting the first quarter’s earnings. JPMorgan Chase & Co (NYSE:) and BlackRock (NYSE:) will report their numbers on Wednesday, followed by earnings results from Citigroup (NYSE:), Wells Fargo (NYSE:), Morgan Stanley (NYSE:), and Goldman Sachs (NYSE:) on Thursday.

Traders would be focused on two aspects when it comes to bank earnings; they would like to know what these Wall Street giants think of the Fed’s current monetary policy stance. A higher interest rate environment must add more value to their profit margins. These two important factors are likely to govern their price action this week.

The other important event that traders will be looking at very closely is the US number. The number will be coming on Tuesday, and the forecast is for 1.2%, while the previous reading was at 0.8%.

Inflation is already running way too hot. If the actual number comes even hotter than the forecast, we are likely to see much higher volatility in the equity, forex, and fixed-income markets. Traders are highly likely to be spooked by a strong inflation number as that will confirm that the Fed is more likely to by 50 basis points rather than 25 basis points. While inflationary pressures will remain, we believe March will be the top inflation rate in terms of the rate of change.

Economic numbers on and will be released on Thursday. On Friday, which is a market holiday, and numbers will be out.

On Thursday, the will most likely remain silent but express its desire to continue on the path of monetary policy normalization. Christine Lagarde, the ECB President, may hint that liftoff may occur in the second half without providing specifics. Also, this week, the and may raise interest rates, while remains unchanged.

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