OUR SUMMARY
Heading into a shortened trading week due to the UK’s Good Friday holiday, attention turns to a busy economic calendar, particularly for the UK. Labour market data on Tuesday, followed by inflation figures midweek, are expected to shape market expectations around the Bank of England’s next policy move, with current pricing suggesting a 95% likelihood of a rate cut in May.
Across the Channel, the European Central Bank is anticipated to lower rates from 2.5% to 2.25%, with a similar 95% probability priced in by markets. Beyond the rate decision, investor focus will center on any ECB commentary addressing the potential fallout from new U.S. trade tariffs, particularly those floated by Trump, and how they may influence future monetary easing.
In the U.S., markets await further clarification on semiconductor tariffs after Trump’s weekend remarks. The dollar has started the week on the back foot, weighed down by uncertainty surrounding shifting U.S. trade policy.
Meanwhile, both GBP/USD and EUR/USD are holding near recent highs, reflecting broad dollar softness and anticipation around central bank action in Europe and the UK.
