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EU & US inflation numbers dominate the week ahead

Sterling still trading at the top of expected ranges..
With very little to go on this week in terms of economic data, the Pound will be moved by events elsewhere. This is not necessarily a bad thing, as recently this has favoured GBP (especially with the current banking fallout). However, not much upside is expected at all, as most traders deem Sterling to be at a much higher level than it probably should be

A positive £ is mirroring positive UK sentiment at the moment after recent political and economical stability. Still, the Pound is limited to further gains because of sticky inflation and a more dovish central bank on interest rates. That's not to say an increase in value is not off the cards completely this week, it's just the likelihood of weakness from here outweighs more possible strength.

It has been a punishing 2-weeks for the single currency, but some light at the end of the tunnel can be seen. That's if economic data results return what is forecast and European banking fears subside. The latter has been aided by Deutsche bank gaining 6% today after suffering steep loses on Friday.

Euro-Zone inflation numbers are key to financial markets and consensus is to see a rather dramatic fall from 8.5% to 7.5% for March. This didn't work out for the UK last week, but the Euro-Zone & ECB have been tackling a different beast altogether. An increase in inflation will see the EUR decrease and likely visa-versa if inflation drops.

17 former SVB branches will open as First Citizen branches today, after the bank bought all the loans and deposits of SVB for $16.5B. One of the largest family-controlled banks (top 20 in the US) has steadied banking sector stocks, for now. Contagion is onto it's 4th week and the chances of something happening with a new bank this week is high.

The USD remains under pressure and the £-$ rate is facing some support now above 1.20 mid-market levels. The inflation rate this week is huge news for financial markets and the forecast is to remain unchanged from last month, neither good or bad news really. Central bank speeches will be something to watch out for this week and a weaker $ could remain for some time yet.