The ECB is now likely to cut rates before the Fed
Despite inflation falling in the eurozone, the ECB's main refinancing rate is forecast to remain at 4.5%. The market widely sees an initial rate cut in June.
The Federal Reserve
For months, a June Fed rate cut was traders' favourite bet, but after Wednesday's stronger-than-expected consumer price index (CPI), they don't see any policy easing before the Federal Reserve (Fed)'s mid-September, which would mean that a 75 basis point cut this year is no longer on the cards. The market now sees only two 25-bps cuts this year.
Later on Wednesday, the minutes published last night of the Federal Reserve meeting in March showed Fed members to be concerned that inflation wasn't moving down quickly enough. The one hint at dovishness was that there was the expectation that rates would still come down this year. Federal Open Market Committee (FOMC) members voted to keep language in the post-meeting statement that they wouldn't be cutting rates until they "gained greater confidence" that inflation was on a steady path back to the central bank's 2% annual target.
European Central Bank
Despite inflation falling in the eurozone, the European Central Bank (ECB)'s main refinancing rate is forecast to remain at 4.5%. The market widely sees an initial rate cut in June.
China's consumer inflation
China's consumer inflation cooled more than expected in March. Consumer prices rose by a muted 0.1% in March year-on-year (YoY), after a 0.7% rise in February and missing expectations for a 0.4% rise. Factory-gate prices fell 2.8% in March YoY, after a 2.7% slide in February. Producer Price Index (PPI) has now been declining for a year and a half, maintaining pressure on policymakers to launch more stimulus as demand remains weak.
Constellation Brands
Constellation Brands is scheduled to report on Thursday before the market opens. The street sees earnings of $2.11 per share, up 6.6% year-on-year (YoY). Revenue is forecast to increase by 5.5% to $2.1 billion. Demand for the group's popular brands of beer like Corona and Modelo continues to remain strong, but weakness could come from its Wine and Spirits business.
WTI and Brent
On the commodity front, WTI and Brent rose on Wednesday after an escalation in Middle East tensions. In the US, low crude exports last week led to an increase in US crude oil, gasoline, and distillate inventories, according to the Environmental Impact assessment (EIA).
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