Perhaps the most important reports this week will be the monthly U.S. nonfarm payrolls and the Purchasing Managers’ Index, which will be released in a number of major economies, as well as any developments related to the trade dispute between the U.S. and China and the Brexit.
Hopes for a trade deal rose after the US-China trade negotiations last week, but markets will keep tracking the latest developments as Chinese Vice Premier Liu He returns to Washington this week for further talks.
If the two sides reached a tentative agreement this week, it could have a negative impact on the U.S. dollar, which still plays the role of safe haven currency.
In terms of economic data, the jobs report may indicate that U.S. employers created 175,000 jobs in March and the unemployment rate settled at 3.8%, according to expectations of the U.S. jobs report.
The manufacturing and service PMI data will also be of interest to investors, as well as retail sales and durable goods orders data.
The green currency will most likely be affected by investors’ sentiment, trade talks outcome and Friday’s NFP report.
This week, the euro is expected to be affected by the release of important economic data related to economic activity and inflation in the eurozone at the end of the first quarter, especially after the European Central Bank latest cut to the euro area’s growth and inflation outlook.
Investors will focus on the final manufacturing PMI manufacturing in the eurozone, which may show a narrowing growth to 51.3 in March from 51.9 in February.
Eurozone flash consumer price index reading is also expected to stabilize at 1.5 percent in the year ended March.
Last but not least, the minutes of the ECB's monetary policy meeting will give an in-depth look at the economic conditions that influenced the Governing Council’s decision to set interest rates.
Pound Sterling fell for the second week in a row last week as uncertainty about Britain's exit from the European Union remained the key mover to the cable.
The UK will release the manufacturing, services and construction PMI for March, which will provide the latest update on the health of the economy in the first quarter.
Expectations are in favor of witnessing a narrowing growth in the three major sectors. If the actual reading matched forecasts, this may put further negative pressure on the pound.
Gold fell for the first time in four weeks last week as the dollar's rise led to lower demand on gold as an alternative investment.
The direction of the yellow metal this week will largely depend on the outcome of the U.S.-China trade negotiations, in addition to the ability of the metal to rise above the psychological level located at $1,300 an ounce.
With regard to oil, prices managed to surge for a third week in a row to record the biggest quarterly increase since 2009 last week as a result of continuing supply cuts by OPEC and US sanctions against Iran and Venezuela.
The U.S. government EIA report due this week is expected to show that crude
oil inventories edged up by 3 million barrels in the week ended March 29, after
a drop of 2.8 million barrels a week before. A rise in US crude stockpiles may
put oil prices under negative pressure.