Investors eye US data later in the week; earnings remain in focus

Equity markets a slightly under pressure on Tuesday following a wide array of earnings releases and as investors eye further US data later in the week.

Interest rate expectations have become more hawkish in recent weeks but investors don’t appear convinced it’s going to unfold that way. We’re still looking for weaknesses in the labour market and signs of inflationary pressures softening, something we could see over the next couple of months at which point expectations could be pared back once more.

Ueda indicates BoJ tweaks unlikely this week

Earlier today, new Bank of Japan Governor Kazuo Ueda appeared to push back against the prospect of any changes to monetary policy ahead of the meeting on Friday. While the central bank was not expected to make any changes, there remained the possibility of a tweak to yield curve control given the higher inflation we’ve seen, possibly signaling a slight change in direction under the new leadership.

But Ueda appeared to indicate that isn’t something that will be considered at the current time, warning that if inflation or wages rise more than expected – despite the former still being driven by cost-push factors – a response such as rate hikes could be considered. But he insisted that tightening now could cause a grave situation in the future, which appears to have closed the door to such a consideration this week.

Could we soon see sharp declines in bitcoin?

Bitcoin has pulled back into an interesting zone after briefly breaching $30,000 in recent weeks. It fell towards $27,000 earlier in the week, around $500 above the lows in the second half of March during the ascent. A break of $26,500 now could signal a much sharper decline, although some consolidation between here at $29,000 may be more likely for now.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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