What’s Happening Today

Today kicks off without any significant data releases. ECB President Lagarde and Fed’s Bostic and Cook are scheduled to deliver speeches.

Looking Ahead This Week

Later this week, we’ll be watching for inflation data from Spain, France, and Italy, providing insight into the upcoming euro area HICP print next Wednesday. The US PCE inflation data is set for release on Good Friday. The Central Bank of Hungary will also announce its monetary policy rate decision on Tuesday.

Weekend Highlights

In Russia, a terrorist attack occurred near Moscow on Friday night, resulting in over 130 confirmed deaths and more than 180 injuries. The Islamic State claimed responsibility, though the Kremlin attempted to implicate Ukraine. However, both Ukraine and US intelligence services denied any involvement by Ukraine. Russian President Putin stated that the attackers were apprehended while trying to flee to the Ukrainian border.

In Poland, a Russian missile breached Polish airspace early Sunday following Russia’s extensive airstrikes on Ukraine. The Polish government demanded an explanation from Russia.

President Biden signed a $1.2 trillion spending bill in the US to avert a partial government shutdown after Congress approved the bill on Saturday. This bill solely funds the government and is separate from other packages, including aid to Ukraine.

Friday’s Developments

Fed’s Bostic projected only one 25bp rate cut in 2024, down from his earlier forecast of two cuts, emphasizing concerns about inflation. In the euro area, ECB’s Centeno and Scicluna hinted at potential rate cuts, with June seen as likely to be the first cut.

The March Ifo index surpassed expectations in Germany, indicating improvement but still reflecting a weak economy. Japan’s most prominent union group reported a 5.25% average wage hike, supporting the BoJ’s narrative for exiting NIRP.

Market Update

Global equities saw marginal declines on Friday, influenced by US markets despite tech sectors outperforming. US and European futures are mostly lower today.

In the bond market, expectations for the first rate cut from global central banks, possibly in June, gained traction. European bonds rallied, with Bunds leading the way.

FX markets witnessed USD strength and CNY sell-off, with EUR/USD retreating to the 1.0800 level and USD/CNY falling back towards 7.20 after speculating a weaker CNY.

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