It’s one of those weeks which has everything – multiple major central bank meetings, big economic data releases, huge megacap earnings announcements – all amid the backdrop of the ongoing Middle East conflict. The Fed is the central starting point as its reaction to the oil shock is what keeps rate expectations elevated and impacting most markets. The central bank sees the Middle East-driven jump in energy as a supply shock it can mostly look through, but it also knows sustained oil prices can feed inflation expectations and keep policy tighter for longer.

That is why markets are still pricing some tightening in the eurozone and UK too. A June hike is close to fully priced, yet the data is messy: inflation is higher, but mostly because of motor fuel, while core and food effects will take time to show up. At the same time, natural gas is not anywhere near the crisis levels seen in 2022, and that argues for patience rather than any kind of panic from rate setters. Credibility is likely front and centre, for officials, certainly at the ECB, but some staying power is required.

Ultimately, central banks need to keep the threat of policy tightening alive so inflation expectations don’t drift higher, but they also don’t want to tighten financial conditions so much that they crimp already fragile growth. That is why this feels less like a classic inflation cycle and more like an integrity test: if policymakers talk tough but do nothing, markets may start to call their bluff. The flip side is if they overdo it, they risk repeating the old mistake of hiking into a growth shock.

Regarding megacap earnings, they seem to be a test of one thing: can AI capex keep translating into real revenue, margins and cash flow, or are investors still paying for the promise? The bar is high for Microsoft and Amazon on cloud and AI demand, while Meta and Alphabet need to prove that heavy spending is still feeding into stronger monetisation rather than just bigger bills.

In Brief: Major Data Releases of the Week

Tuesday, 28 April 2026

Bank of Japan Meeting: Consensus expects the BoJ to remain on hold amid the Middle East uncertainty. The bank’s quarterly outlook is likely to show upward revisions to inflation and modest downwards adjustments to GDP. But growth will probably be forecast to remain above potential, supporting rate hikes soon.

Wednesday, 29 April 2026

Bank of Canada Meeting: The bank will leave its policy rate unchanged at 2.25% with core inflation broadly in line with its target and the jobless rate relatively steady. Traders price in about a hike and a half by year-end. No explicit policy guidance is likely, but the policy rate will probably lean hawkish.

FOMC Meeting: In truth, not much is expected from this meeting, Chair Powell’s swan song. There will be no new projections or dot plot, with the recent March dots showing the median vote leaned towards one rate cut in 2026. Key is whether energy pressures feed into core inflation?

Thursday, 30 April 2026

ECB Meeting: The ECB is fully expected to maintain steady rates. A first hike is predicted by markets in June, with around 58bps priced in for 2026. Lagarde is likely to keep a data dependent stance given officials’ absence of urgency to act and lack of new information.

Bank of England Meeting: Policymakers will keep the Bank Rate at 3.75% amid a still heavily divided MPC. More data is likely required for action, but money markets price in just over two 25bps rate hikes by end-2026. Rate setters must balance weakness in economic growth and the labour market with potential second round inflation effects. 

Friday, 01 May 2026

US ISM Manufacturing: A small pick up is forecast though this may be due to front running price increases linked to the ongoing Middle East conflict. Labour market signals could turn softer among cautiousness in businesses.