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• At the least at the time of writing this report, markets again are engaged in some kind of short-term wait-and-see, consolidation trading. Of course, yesterday’s intraday trading in the US showed the fragility of this balance. For now, there is no high profile news/headlines from the trade tariffs area. In this context, the focus might turn a bit more to the upcoming economic data today and later this week. The Fed recently made any reassessment on a restart of the easing cycle dependent on a (substantial) deterioration in the labour market. In this respect, the JOLTS job vacancies and labour market subseries in the Conference Board consumer sentiment survey will be in focus. So are tomorrow’s ADP job report and Friday’s US payrolls. For now, US yields are trading little changed/rising marginally, holding within reach of the short-term lows but this still can turn out quite different later today. German yields also show very limited moves, easing 1-2 bps across the curve. European investors also still are pondering recent comments of at least some ECB members on the potential deflationary impact of tariffs on the EMU economy. Even so, the ECB March consumer survey (cf topic below) suggests that at least consumers see the current context as containing more rather than less inflationary risks. The immediate impact of the survey release on markets was limited. Even so, we have the impression European markets recently focused (more than) enough on growth risks. If upcoming inflation data don’t fit the disinflation narrative, maybe at some point there is room for some rebalancing of market themes also in EMU. European equities stall after recent rebound (Eurostoxx -0.4%). US indices open with a similar loss (S&P 500). After a rebound last week, oil is also again drifting lower (Brent $ 64.5 p/b).
• The ‘stalemate’ in interest rate markets and equities also reigns the major USD cross rates. However, for now the dollar looks unable to take out any significant technical resistance levels. DXY gain trades near 99.1. EUR/USD rebounded to the 1.14 big figure. USD/JPY is changing hands near 142.3 compared to a ‘short-term top’ near 144 end last week. Any negative news for the upcoming data is a risk of causing return action to the recent USD lows. After staging a nice technical comeback of late, the ST sterling rebound also shows signs of petering out. EUR/GBP holds close to even marginally north of 0.85.
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• In the ECB’s March consumer inflation survey, expectations for the annual price increase for the year ahead rose from 2.6% to 2.9%. The 3-year ahead gauge picked up 0.1 ppt to 2.5%. These highest readings since April and March 2024 respectively were recorded in a survey period that just missed out on the April 2 tariff announcement by US president Trump. The 5-year forward looking indicator, published for the first time, stabilized for a fourth month straight at 2.1%. European consumers expect their nominal income to grow by 1%, the same as in February, while spending growth is seen at 3.4% vs 3.5% in February and 3.6% in January. Expectations for economic growth and unemployment have been fluctuating within a narrow range over the previous months with the former coming in at -1.2% (unchanged) and the latter 10.4% (slightly lower from 10.5%). In terms of housing, consumers believe prices of their homes to rise by 3.1% over the next 12 months, a small uptick from February. Mortgage rates are thought to remain broadly the same (4.4%).
• Belgian GDP was up 0.4% Q/Q in 2025Q1 with the year-on-year growth rate coming in at 1.1%. Economic activity accelerated from 2024Q4 (0.2%) thanks to the construction sector, where value added climbed 0.9%. Services sector activity increased by 0.4% while the industry stabilized. On the price front, inflation in April eased to 2.55% from 2.91% thanks to a 0.83% m/m drop. This in turn was the result of a sharp decline in energy prices: natural gas tanked by 5.9%, electricity fell by 4.6% and motor fuels by 1.4%. Dairy products & eggs (-2.8%) and city trips (-4.6%) also helped push the headline index lower. Offsetting this was a sharp uptick in plane prices (+11.1%) and hotel rooms (5.4%). Stripping the index for food and energy, core CPI quickened from 2.71% to 2.82% while services inflation accelerated too (3.96% from 3.88%). Inflation measured according the European rules (HICP) comes in at 3.1%.
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EMU 10-y swap: decline slows. Enough deflation risk discounted?
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DXY index: USD fails to regain any relevant resistance. Still vulnerable to negative headlines/weak eco data.
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EUR/HUF: forint hardly reacts as MNB holds policy rate at 6.50%. MNB signals tight conditions stay warranted.
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USD/CAD: Loonie holds recent gains even as Liberal party probably won’t have a majority in the Lower House.
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