A busy data week is off to strong start with important inflation releases from Germany and the US, points out the research team at Danske Bank.

Key Quotes

“Later this week we get Chinese Caixin PMI, US ISM manufacturing, FOMC meeting, euro area inflation not to forget nonfarm payrolls. We also have the Norges Bank meeting on Thursday but that's likely to be a non-event, see 'Selected Market News' below.”

“Today, in Germany, the inflation prints will give final guidance ahead of the flash euro area estimate released on Thursday. Friday's French and Spanish inflation estimates were mixed.”

“In the US, the key figure today is PCE inflation. Based on the GDP report Friday, it seems like PCE core rose 0.1%m/m in March (assuming no revisions to previous months), which is lower than what most expected previously. This should still be enough to boost the yearly core rate to 1.9% due to the base effects from the drop in wireless telephone service prices last year. Irrespective, we still expect the Fed to move on with the hiking cycle this year.”