ForexLive European FX news wrap: The calm before the storm?

Headlines:

• What is the distribution of forecasts for the US CPI?
• US CPI to reaffirm stall in disinflation progress?
• ECB's Šimkus: We will see if we cut rates or pause in April
• ECB president Lagarde says must set policy so inflation converges to 2% target
• Trump's steel and aluminum tariffs take effect
• EU says to respond to US steel, aluminum tariffs with countermeasures
• UK trade minister says negotiating with the US to eliminate additional tariffs
• US MBA mortgage applications w.e. 7 March +11.2% vs +20.4% prior
• Russia says waiting to hear from US on acceptability of a ceasefire
• Honda agrees to ¥15,000 average monthly wage hike for 2025

Markets:

• CAD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.8%
• US 10-year yields up 0.7 bps to 4.295%
• Gold flat at $2,914.63
• WTI crude up 1.0% to $66.90
• Bitcoin up 0.2% to $82,941

The market is catching an air of relief ahead of the US CPI report later in the day. But is this just the calm before the storm?

Risk trades are holding up and the dollar is also keeping steadier, with some hope that the inflation numbers will offer some reprieve after a volatile and rough week thus far.

S&P 500 futures are now up 0.8% with tech shares leading the rebound after the late recovery yesterday as well. European indices are also holding higher as such with the DAX now nearing 2% gains. It feels like it's one way or another for stocks, with no real in between.

In FX, USD/JPY is holding up with the pair gradually nudging higher from 148.20 to 148.60 levels during the session. EUR/USD remains little changed as it weaves in and out of the 1.0900 mark while GBP/USD is flattish at 1.2950 levels currently.

USD/CAD is down slightly by 0.1% to 1.4415 with the Bank of Canada policy decision is focus alongside more tariff developments later in the day surely.

It's all to play for in the second half of this week and the US CPI report today will hopefully offer something more decisive for market players to work with. Otherwise, we'll continue to be sucked into following every tariff headline until the dust settles when Trump feels it should.