🌎Coming Week Preparation · Maison YR Trading

🌎Coming Week Preparation

🌎 FUNDAMENTAL REPORT – Preparation for the Coming Week

The markets are entering an extremely sensitive week where geopolitics could once again dictate the tempo.

The US-Iran conflict continues to dominate investors’ attention, with negotiations still ongoing but no concrete agreement yet regarding the reopening of the Strait of Hormuz.

As a result: oil remains firmly above $100, central banks are starting to navigate an increasingly uncomfortable environment between energy-driven inflation and slowing economic growth, while markets continue to swing constantly between euphoria and geopolitical stress.

🇺🇸 Extremely important week ahead for the dollar and the Fed.

The main event is obviously the official arrival of Kevin Warsh as head of the Federal Reserve following the end of Jerome Powell’s term. The market still doesn’t really know his monetary policy bias yet, which is creating a huge amount of uncertainty around upcoming Fed decisions.

On Wednesday, the latest FOMC minutes will be closely watched to measure:

the level of internal division within the Fed,
the appetite for a rate hike as soon as June,
and especially the impact of rising energy prices on inflation projections.

The market is still pricing very little tightening despite:

CPI and PPI continuing to accelerate,
a labor market that remains solid,
and energy prices moving sharply higher again.

The dollar remains stuck between several opposing forces:

support from elevated oil prices, geopolitical tensions, and higher US yields,
but vulnerability in case of a US-Iran agreement or weak US Treasury auctions.

Also keep a close eye on Wednesday’s US 20-year bond auction, which could become a real stress test for the bond market.

On the data side:

preliminary PMIs,
Philly Fed,
and housing datawill all be important to measure whether the economy is actually slowing down or not.

Finally, massive focus on NVIDIA on Wednesday evening. US indices continue to ignore macro risks thanks to the AI theme.

But expectations have become extremely high. Even a slight slowdown in guidance could quickly contaminate overall global risk sentiment… and therefore FX markets.

🇪🇺 The European Central Bank remains stuck between inflation and slowing economic growth.

The market is now almost treating a June ECB hike as a done deal, especially after the rebound in inflation components in the latest PMIs and rising energy tensions linked to the Middle East.

But the real issue remains growth.

This week’s European PMIs will therefore be crucial:

if German manufacturing falls back below 50,
or if services slow down aggressively,the ECB doves will quickly regain influence.

The euro therefore remains in a delicate position:

supported by rate hike expectations,
but weakened by still fragile economic prospects.

At the same time, concerns around Germany continue to worsen with:

nearly stagnant growth,
heavy energy dependency,
and industrial pressure caused by elevated oil prices.

As a result, EUR/USD will likely depend mainly on:

oil prices,
PMIs,
and geopolitical headlines.

🇬🇧 GBP is becoming increasingly difficult to trade.

The UK is now dealing with:

political tensions,
rising yields,
elevated inflation,
and slowing economic growth.

Markets are starting to seriously question the political stability around Keir Starmer, bringing back uncomfortable memories of the September 2022 United Kingdom government crisis gilt crisis during the Liz Truss episode.

UK yields are exploding:

the 30-year yield is now above 5%,
while GBP continues to weaken sharply against the dollar.

The week ahead will be packed with:

CPI inflation,
retail sales,
labour market report,
and PMIs.

The most problematic scenario for the Bank of England would be a combination of:

inflation remaining close to 4%,
while economic activity slows down aggressively.

In that case, the BoE could become even more hawkish while markets simultaneously start pricing in stagflation risks.

Very complicated environment for the pound right now.

🇯🇵 The yen remains under massive pressure.

USD/JPY has moved back above 158 despite verbal threats from Japanese officials, proving that the market no longer truly believes in intervention without an actual monetary policy shift behind it.

This week will be important with:

Japanese GDP,
Manufacturing PMI,
and BoJ speakers.

The market is now looking for one thing only:whether the BoJ can realistically hike rates in June.

If the data surprises to the upside and officials become more hawkish, the yen could finally get some relief.Otherwise, pressure will likely remain extremely strong.

🇨🇦 CAD watching inflation and consumption closely.

Canada is entering a delicate phase.

The market will mainly focus on:

CPI on Tuesday,
retail sales on Friday.

A strong CPI could temporarily support CAD… but if consumption slows sharply afterwards, the market will quickly move back toward a stagflation scenario and future BoC rate cuts expectations.

High oil prices are still helping CAD for now, but be careful:if trade tensions return or global demand slows down, that support could disappear quickly.

🇦🇺 AUD still depends heavily on China.

Focus will mainly be on:

Chinese data on Monday,
and the RBA minutes on Tuesday.

The market is searching for signs that the Chinese economy is finally stabilizing… but honestly, expectations remain relatively low given the global backdrop.

The RBA remains relatively hawkish compared to other central banks, which could continue supporting AUD if the minutes confirm that bias.

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🌎Coming Week Preparation

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