Week Ahead -The bond market selloff continues

The bond market selloff did not ease up heading into the long holiday weekend and traders will have to soon decide if they decide to sell in May and go away.  The upcoming week is filled with another round of earnings, major economic data out of China, a French debate, and a wrath of commentary from finance ministers and central bankers at the IMF/World Bank spring meetings.


After a long weekend, Wall Street is ready to dive back into earnings season.  The second week of earnings will provide a better picture of which companies are quickly passing on their higher costs.  This week we will learn more about how confident the airlines are with travel demand, how supply chain issues are impacting IBM, Tesla, and Procter & Gamble. 

Economic data releases for the week will focus on manufacturing activity, housing data, and the flash PMI readings for April.  The US economy is still on solid-footing, so expectations across a wide range of economic data is expected to moderate. 

Fed speak for the week contains appearances from Bullard, Evans, Daly, and Chair Powell. With the Fed firmly committed to an aggressive start with the tightening of monetary policy, traders will look for clues to see which members are growing concerned about economic growth and if that could lead to less aggressive Fed tightening bets for later in the year. 


A shortened week next week as a result of the long bank holiday weekend. The data mostly consists of tier two and three releases, with the only exceptions being the flash PMIs on Friday. Final CPI data will be of interest on Thursday but any shock and awe will likely have come from the flash readings. And with the ECB taking its time to wrap up bond-buying and start raising rates, it would take something quite substantial to rock the boat. We’ll hear from Christine Lagarde next Friday but if the press conference is anything to go by, it’s not one to look forward to.

The war in Ukraine remains front and centre though, with progress appearing to have stalled in negotiations. Commodity prices remain high as the West continues to explore further sanctions. Pressure will continue to ramp up to ban oil and gas as Russia commits further atrocities but it will continue to face resistance from Germany in particular due to the economic consequences at home of such a move.


Another shortened week for the UK with retail sales and PMIs the highlights next Friday. BoE Governor Bailey will speak on Thursday which will be interesting given the latest inflation data. The cooling of the hawkish rhetoric may well be dropped shortly after it was adopted.

Fines to Johnson and Sunak may have created some political instability a couple of months ago but that’s not looking likely now.


The invasion of Ukraine remains the focus as far as Russia is concerned, with sanctions continuing to come from the West in response to the atrocities it’s committing. 

Central bank head Elvira Nabiulina speaks at the Duma on Thursday. They have started unwinding their rate hikes recently as the currency has stabilised. 

South Africa

CPI inflation data on Wednesday is the only notable release next week. It remains at the upper end of its 3-6% range as the SARB continues to raise rates to pull it lower. 


The CBRT left interest rates at 14% on Thursday while blaming everything except its policy decisions for the surge in inflation to 61%. The monetary policy review continues. No major events or data next week. 


China releases a flurry of data in the coming week but markets will be watching the evolution of China’s Covid-19 situation as the Shanghai lockdowns drag on. That has held back equities this week and an escalation will be a strong headwind next week if it worsens.

With a slowing economy in mind, markets are also expecting stimulus measures to appear finally. A RRR cut could come as soon as Friday, or anytime next week. The next MLF matures tomorrow and we could see the 1-year rate trimmed. Failing that, China announces its 1 and 5-year Loan Prime Rate decisions on Wednesday and a 1-year cut could be a possibility. Any of these will provide a short-term boost to local equity markets.

On Monday, China releases GDP, industrial production, retail sales and industrial capacity. All of this data has downside risks and soft data will weigh on local equities and potentially weaken the Yuan. USD/CNY and USD/CNH are approaching medium-term resistance levels, a move higher through 6.4000 will signal more Yuan losses ahead.


The Reserve Bank of India laid the groundwork for tightening monetary policy this week, but buoyant global stock markets and a weaker US dollar at the end of the week have sheltered equities and the INR from negative fallout. India is on holiday today and Friday of this week.

India releases WPI for food, fuel and manufacturing on Monday. All have upside risks that could see markets pricing in the RBI tightening policy sooner. Expect headwinds for local equities while the INR remains at the mercy of the US Dollar direction on international markets.

Instability in Pakistan following a change of government could have negative spillovers into India’s asset markets.


Australia is on holiday on Monday and equities have been content to follow Wall Street’s direction, while the AUD has held steady with commodity prices and a slightly hawkish change in the language of the RBA. 

Australia releases Retail Sales on Thursday and PMIs on Friday. Both have downside risks that could weigh on local markets. Conversely, higher numbers would increase the tightening pressure on the RBA.

The federal election was announced for May this week, but as yet, the probable change of government is being discounted by local markets.

New Zealand

New Zealand is closed on Monday. The NZD is ending the week under pressure as the RBNZ hiked rates by 0.50%, but left its terminal guidance unchanged. Services PMI on Tuesday and inflation on Thursday have upside risks and could spark more selling of NZD as the RBNZ gets perceived as being ever further behind the inflation curve.

A sagging property market and rampant cost of living increases are increasing political pressure on the government in New Zealand, limiting gains by equities and the NZD. 


USD/JPY remains very near recent highs as the US/Japan rate differential remains elevated. Further moves higher by US yields next week could push USD/JPY to near 128.00. Equities are tracking US markets for now.

The only data this week is inflation on Tuesday which should contain no upside shocks, much like the past 25 years.


The MAS has tightened monetary policy by recentering the NEER band and increasing the appreciation slope. That has led SGD into the end of the week. Singapore releases non-oil exports on Monday and weak numbers will raise fears that the MAS is hiking into a slowing economy, a negative for local equity markets.



Oil prices are a little higher on Thursday after rallying strongly the previous two days. The flirtation below $100 didn’t last long as the slight lifting of restrictions in China partly removed one key downside risk for prices. With the IEA reserve release priced in, that leaves the risks heavily tilted to the upside as OPEC remains committed to its key ally and unable to hit the quotas its been set anyway.

That could leave Brent prices ranging between $100 and $120 for now, with WTI more like $95-115. There’s no shortage of risks to that though and this remains an incredibly headline-driven market. The prospect of Finland and Sweden joining the NATO alliance is unlikely to ease tensions between Russia and the West which could further spill over into the oil market. 


It would appear gold isn’t going to extend its winning run to seven days ahead of the long weekend. It’s trading a little lower on Thursday after running into some resistance around $1,980. The yellow metal continues to show momentum which may suggest a run at $2,000 is on the cards. At a time of such aggressive tightening, it’s unclear whether it’s a fear of inflation, the economy or risk that’s driving the move, perhaps all of the above. But there’s no shortage of demand at the moment.


An encouraging rebound in bitcoin on Wednesday was short-lived, with the cryptocurrency once again in the red on Thursday. It appears to have struggled around the midpoint of Monday’s sell-off which could be viewed as a bearish signal. I’m not sure I’ll read too much into that but it’s certainly lost all breakout momentum in recent weeks. It continues to trade more broadly in its 2022 recovery channel and recent price action suggests it could be heading for another move towards the lows. That’s around 10% from the current price and a break below here could be a very bearish development.

Monday, April 18

Economic Data/Events:

  • China quarterly GDP and March Industrial production, retail sales and other key indicators
  • Easter Monday: UK and most of European financial markets are closed
  • IMF/World Bank spring meeting begins
  • Fed’s Bullard speaks
  • Spain Trade
  • Canada existing home sales, housing starts
  • India wholesale prices

Tuesday, April 19

Economic Data/Events:

  • US housing starts
  • G-20 finance ministers, central bankers meet at IMF/World Bank spring meetings
  • Fed’s Evans speaks
  • IMF releases World Economic outlook
  • Japan industrial production
  • Mexico international reserves

Wednesday, April 20

Economic Data/Events:

  • US existing home sales
  • Fed’s Beige Book is released
  • Fed’s Daly and Evans speak at separate events
  • French presidential debate
  • Canada CPI
  • South Africa CPI
  • Japan Trade
  • Italy Trade
  • China loan prime rates
  • Eurozone new car registrations, industrial production
  • EIA crude oil inventory report

Thursday, April 21

Economic Data/Events:

  • US initial jobless claims, Leading index
  • Eurozone CPI
  • New Zealand CPI
  • Fed Chair Powell and ECB’s Lagarde speak at event hosted by IMF
  • Eurozone consumer confidence

Friday, April 22

Economic Data/Events:

  • US Flash PMI readings
  • European Flash PMIs: Eurozone, France, Germany, U.K.
  • UK PM Johnson to visit India
  • BOE’s Bailey to speak on IMF panel
  • Japan CPI
  • Canada retail sales

Sovereign Rating Updates:

– United Kingdom (S&P)

– United Kingdom (Moody’s)

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.