As widely expected, the RBA has decided to keep its interest rate unchanged at 1.5%, with the policy statement still being interpreted as largely neutral and data-dependent. The RBA notes: "Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."

On inflation, the RBA added: "Inflation picked up to above 2 per cent in the March quarter in line with the Bank’s expectations. In underlying terms, inflation is running at around 1¾ per cent, a

Investors will likely re-focus on the FOMC meeting and economic data next week, assuming no last-minute surprises from Congress, that could result in a government shutdown.

On the FOMC meeting, CACIB expects the Fed to acknowledge weaker growth and inflation data on Wednesday, but to also signal that this ‘soft patch’ is not enough to change its policy outlook.

"This leaves the window for a June hike wide open, with the usual caveat of data dependency," CACIB adds. 

In terms of next week's US data, CACIB economists are more optimistic than consensus on the core PCE deflator, which they expect to slow only slightly to

We have seen President Trump fire up the extreme populist platform of protectionism in an attempt, in our view, to score some quick points as his first 100 days milestone approaches. First Trump slapped Canada with up to a 20% tariff on lumber imports, then he forced Canada and Mexico to agree to renegotiate NAFTA. He closed the week threatening to “terminate” Korus, the US-S.Korea trade deal (potentially a tactic to get S.Korea to pay for THAAD). Traders were quick to sell the underlying currencies CAD, MXN and KRW on the escalations

 Yesterday ECB rate decision and press conference in our view provided no real surprises. As with the BoJ, the ECB is more  confident about the threat to growth outlooks but inflation remains an uncertainty. For any adjustment, we would have  expected the ECB to have materially shifted their view on the mid-term inflation outlook. The message was around growth  positive with risk retreating “towards a more balanced configuration”. The language used around inflation was basically  unchanged. In our view, the most obvious modification was Mario Draghi's comment that no debate was held