Top 3 Market-Moving Events to Watch Next Week

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TD Securities (TDS) analysts have released their predictions for the top three market-moving events for the upcoming week. Firstly, the US CPI is expected to reveal that core prices have cooled off slightly in March, with the index still showing a strong rise of 0.4% month-on-month (m/m). Recent relief from goods deflation is likely to turn into inflation this month, with shelter prices remaining the key wildcard. Non-core inflation is expected to be dented by slowing gas prices and softer food-price gains. Forecasts imply a 5.1%/5.6% year-on-year (y/y) increase for total/core prices.

Secondly, the Bank of Canada (BoC) rate decision is expected to hold at 4.50%, with recent banking stress removing some pressure after the rebound in Q1 GDP. The BoC’s focus on how to incorporate banking stress in the April Monetary Policy Report (MPR) will be interesting, balancing stronger growth with a more ominous outlook. The tone is expected to be mixed, but one that supports the conditional pause.

Finally, the Federal Open Market Committee (FOMC) minutes will be closely watched. The rate hike at the March FOMC meeting was widely viewed as dovish, but the distribution of the March dot plot for 2023 suggested a more hawkish sentiment across the FOMC. With banking stress now appearing to be somewhat contained, the minutes for this meeting may emphasize this hawkish sentiment given continued elevated inflationary pressures.

As always, the market will react to the outcomes of these events. Investors should keep a close eye on these developments as they could impact the broader economic landscape. It will be interesting to see how the market responds to these events and whether they will cause a shift in the current economic trends.

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