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With European markets reopening after the Easter holidays, investors are set to navigate a mix of geopolitical risks and crucial economic data that may shape sentiment over the coming week.
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Attention will focus on Iran’s response to US President Donald Trump’s deadline to reopen the Strait of Hormuz, a critical chokepoint for global oil supplies. Any escalation or de-escalation could quickly affect energy markets, driving oil prices and inflation expectations.
J.P. Morgan noted on Thursday that oil prices could reach as high as $150 a barrel if supply disruptions persist until mid-May.
Beyond geopolitics, inflation data, central bank signals and corporate updates will also draw attention as markets gauge the outlook for the second quarter.
Economic data in focus
The macroeconomic calendar kicks off on Tuesday with the release of eurozone PMI data, a key leading indicator of economic activity. Recent readings have pointed to slowing growth in the bloc, with the composite PMI signalling only marginal expansion amid softening demand and heightened uncertainty.
On Wednesday, investors will examine the latest eurozone retail sales and industrial producer price figures from Eurostat. These will shed light on consumer demand and upstream inflation pressures.
The European data schedule remains relatively light but still significant. Euro area financial accounts will provide additional detail on lending trends, while UK markets stay attuned to labour market and growth signals following recent signs of stagnation.
Focus then shifts to the US, with the release of the Federal Reserve’s latest meeting minutes on Wednesday. These will be scrutinised for hints on policymakers’ views regarding the timing of any potential rate cuts.
Thursday brings key US labour data, including weekly jobless claims, offering further insight into employment conditions.
The week ends with the US consumer price index for March, including the closely watched core CPI reading. A stronger-than-expected figure could dampen hopes for policy easing and spark volatility in global markets, including Europe.
On the corporate side in Europe, activity is limited, although Raiffeisen Bank International’s annual general meeting on Thursday will be watched for any signals on banking sector health and regional credit conditions.