Inflation Haunts Markets, CPI on Agenda Today

Earlier, the German wholesale price index, which shows the change in the price of goods sold by wholesalers, rose from 16.6% to 22.6% yearly, while the monthly base quadrupled from 1.7% to 6.9%. Still, for ECB, that does not mean anything as the central bank is not expected to raise rates anytime soon.

European traders will also pay attention to the ZEW surveys from Germany and the eurozone, expected to continue trending lower amid catastrophic inflation and the conflict in Ukraine.

Later today, the main focus will be on the March Consumer Price Index (CPI) release, with the Producer Price Index (PPI) set to follow on Wednesday. The yearly rate of the CPI is expected to rise further to 8.3%, up from 7.9% in February. In addition, the core CPI is set to rise to 6.4%.

Wednesday's PPI is projected to accelerate again to 10.5% yearly, up from 10% previously, while the core PPI is expected at 8.4%. 

At least, the Fed is doing something to curb inflation - a 50 bps is already priced in for the central bank's next two meetings.

In the FX market, the USDJPY pair has pushed to new multi-year highs as it marches toward 126. At the same time, the EURUSD pair fell to 1.0850, sending the dollar index to 102.20 - the highest level since the COVID crash in March 2020.