The Week Ahead – Deutsche Bank wobbles, AU, EU and US CPI

With a volatile week behind us in equities, FX and commodities as traders were taking stock of the continuation of the banking crisis coupled with multiple Central Bank meetings, this upcoming week looks positively quiet in comparison. Though with growing rumours of banking giant Deutsche Bank wobbling (it’s share price is down over 24% in the last 3 weeks) and the key inflation figures out of the US, EU and Australia nothing can be taken for granted in the current market environment.

Last week we saw the Fed, SNB and BoE all hike rates as expected, the Fed and the BoE 25bp and the Swiss 50bp, there were indications the end was near though, especially from the Fed who’s language changed from ongoing rate increases “will be appropriate” to “may be appropriate”, this saw a big sell off in the USD

The Week Ahead – Figures to watch

On Wednesday we have Australian CPI, this is a pivotal reading with the market now pricing in a pause from the RBA at their next meeting a weak reading will support the RBA hints from their last meeting that they are close to a peak, an upward surprise would see a repricing of those odds and see a decent move higher initially in the AUDUSD.

On Thursday, out of the EU we have German CPI, where the reading is expected to moderate from last months big beat, again with the ECB still talking tough about their future hiking, we should see some volatility in the Euro on this figure.

Then on Friday, the Feds favourite CPI figure, the Core PCE will be released. Fed Fund futures are currently pricing in a 88% chance of a hold at the next meeting of the FOMC, so a hot reading here could see a big re-adjustment of those odds, sending the USD spiking higher and putting pressure on bond prices. The next FOMC meeting is not until May, so the odds are likely to change as new data becomes available between then and now.

Full calendar of the weeks major announcements below: