RBC Capital Markets

Day ahead: The data in focus today are Sweden Q1 GDP, US University of Michigan sentiment survey, and US personal income & spending. The US income & spending data will include the Fed’s preferred PCE inflation indicator.

USD: Following the prior month's surge in incomes thanks to stimulus payments, an unwind on-the-follow will make for as nearly dramatic a slowing in the April personal income indicator as was the increase in the prior month. With a “disappointing” retail sales report already in hand, the personal spending estimate should really help round out service consumption, where we expect most of the momentum on spending will emanate over coming months. The prior month's growth in overall spending was significant, and while we don’t expect a repeat, our forecast at just below 1% is still rather robust.

Elsewhere: The G7 finance ministers’ virtual meeting today could see the announcement of an agreement on a minimum corporate tax rate, likely to be 15%. In other developments, the UK’s planned reopening in June could be in jeopardy if Covid-19 cases mount further in the next couple of weeks. What is especially worrisome is that the majority of new cases appear to be of the “India variant”, which may be more contagious.

Citi

As we head into the long weekend in the UK and US, we expect current market themes to remain intact. Month-end noise is likely to provide limited directionality while we may see some positioning adjustments into the weekend. Nevertheless, USDCNH looks to confirm the technical breakout of key support levels around 6.40 on a weekly basis, while USDJPY should complete a bullish outside week if it closes above 109.50.

It’s been a lacklustre week for EURUSD and we don’t expect data in the form of economic confidence to change that. The next week brings a significant amount of US data, cumulating in the NFP print next Friday. For today, we have personal income and spending, as well as core PCE. Note that US President Biden is expected to present his budget, where we wouldn’t worry about the numbers which are subject to significant change. US equities are likely to pay the most attention, though futures are modestly higher here.

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