Monetary Decisions, EU CPI & Tariffs—A Triple Threat for Global Markets

Caption:

Markets are bracing for elevated volatility amid a critical week featuring central bank decisions and fresh inflation data. The ECB and BoC interest rate calls will help shape global rate expectations, while CPI readings from the UK and Eurozone add further direction for GBP and EUR. Meanwhile, trade war tensions have returned to the spotlight, with the US imposing on Chinese imports and delaying a tariff on other trading partners—setting the stage for broad macro implications. Expect Markets remain under heavy pressure as U.S.-China trade tensions intensify, with both sides continuing to escalate tariff measures. Increased scrutiny of Chinese and global demand data as traders assess the fallout from escalating trade frictions.

Key Events to Watch:

Wednesday, 16 April 2025 – 09:00

UK CPI (March)

The UKs 2.8% inflation print keeps pressure on the Bank of England, particularly as Britain is among the countries affected by the US tariff (albeit with a 90-day implementation delay). Markets will watch to see if price pressures persist or ease in the face of global trade uncertainty. A softer CPI read could reinforce GBP downside, especially if growth concerns intensify under tariff-related export strain.

Wednesday, 16 April 2025 – 12:00

Eurozone CPI (YoY, Final)

Inflation figures are expected to confirm a 2.2% YoY headline and 2.3% core, aligning with the ECBs path toward gradual policy easing. However, the broader backdrop has grown more complex following the US announcement of tariff on Chinese imports, but delayed others by 90 days—on goods from the Eurozone and other partners.If the data surprises to the upside, markets may begin to reprice the pace of easing, potentially supporting the euro.Conversely, if CPI prints below expectations, it would reinforce dovish expectations and weigh on the euro.

Wednesday, 16 April 2025 – 15:30

US Core & Headline Retail Sales (MoM, March)

US consumers remain in focus with core retail sales expected at 0.3% and headline at 0.2%. Stronger-than-expected prints may reaffirm the Feds higher-for-longer narrative, supporting USD strength. A weak read, however, could fuel concerns that monetary tightening is starting to weigh on demand—especially as new US tariffs loom. These measures may raise future consumer prices and dampen spending momentum.

Wednesday, 16 April 2025 – 16:45

BoC Interest Rate Decision

The Bank of Canada is expected to keep rates at 2.75%, but forward guidance will be key. While Canada faces only a delayed 10% tariff, the potential for escalation could dampen business sentiment and pressure exports. If the BoC highlights external risks or softening domestic data, CAD could weaken further.

Thursday, 17 April 2025 – 15:15

ECB Deposit Facility Rate & Interest Rate Decision (April)

With the ECB set to hold rates at 2.65%, markets will focus on forward guidance, particularly given growing trade frictions. The eurozone faces potential export slowdowns from upcoming tariffs, and ECB President Lagardes press conference will be key to understanding how policymakers view the external drag. A dovish tone could accelerate EUR losses, especially if combined with weak inflation or growth signals.

Thursday, 17 April 2025 – 15:30

US Initial Jobless Claims

Labor market data and regional manufacturing performance (expected: 12.5) will round out the week. With rising trade tensions and input cost risks from tariffs, the manufacturing sector may begin showing early signs of strain.