29/04/2026
April 29, 2026
• Central banks in the spotlight this week: Five major institutions are set to announce interest rate decisions - the Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, and the Bank of Japan, which has already opted to keep rates unchanged.
• Geopolitical turmoil in the Middle East: Elevated oil prices continue to complicate the inflation outlook, just as markets had been hoping for a dovish shift in monetary policy.
• Impact of energy prices: A roughly 10% surge since the start of the war may discourage central banks from cutting rates, or at least push them toward a more cautious tone.
• The Federal Reserve takes center stage: Seen as the "maestro" of global monetary policy, the Fed's April meeting will be Jerome Powell's final one as Chair.
• Fed expectations: Rates are likely to remain unchanged, with Powell stressing that labor market risks lean to the downside, but the fight against inflation is far from finished.
• Inflation data:
• U.S. labor market: Employment data has been volatile strong gains in January and March, but a sharp contraction in February — underscoring fragility in the broader picture.
• Market scenarios for the week ahead:
Scenario 1: De-escalation in the Strait of Hormuz + Fed signals easing If tensions ease and reports emerge of renewed U.S.-Iran peace talks, while the Fed keeps rates unchanged and signals a tilt toward future easing based on expected inflation stability and potential progress toward ending the Middle East conflict:
• The U.S. dollar and oil may decline.
• Gold, U.S. equities, risk currencies, and the Japanese yen may rise.
Scenario 2: Escalation in the Strait of Hormuz + Fed signals tightening If tensions escalate and reports emerge of renewed peace talks but the Fed keeps rates unchanged while signaling potential tightening due to rising inflation and expectations of a prolonged or expanding Middle East conflict:
• The U.S. dollar and oil may rise
• Gold, U.S. equities, risk currencies, and the Japanese yen may decline.
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