Weekly Focus: A Slowly Fought Trade War

Market movers ahead

• In the euro area, we project HICP inflation in March will bounce back to 1.5% y/y supported by Easter effects.
• Several Fed members are due to speak in coming weeks, giving further insight into the future hiking pace.
• Average hourly earnings will again be in focus in the US labour market report for March. We expect PCE core inflation figures to remain unchanged at 1.5% y/y.
• In Japan, keep an eye on private consumption and labour market data.
• We expect Chinese Caixin PMI manufacturing to decline, driven by financial tightening measures.
• In Scandinavia, Danish business confidence and Norwegian house prices are due for release.

Global macro and market themes

• The trade war is being fought very slowly.
• The Fed lifted its rate path slightly due to Trumponomics.
• We are keeping an eye on the increasing Libor/OIS spread.
• The Brexit transition deal is not a game changer for EUR/GBP.

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