Weekly market outlook amid risk aversion sentiment

On Easter Monday, the greenback maintains its strength against its rivals despite thin trading conditions due to the long holiday in most trading hubs. The US Dollar Index, which recorded its highest weekly close since March 2020, continued to climb as rising US Treasury bond yields fueled gains in the European morning. Stock exchanges in Europe will be closed on Monday. US bond and stock markets will operate regularly, but no macroeconomic data will be released. 

Meanwhile, oil prices are expected to remain a hot topic amid reports that the European Union is considering a gradual ban on Russian oil imports.

Economic data in Europe

On Thursday, the Eurozone will publish final inflation figures for March, which are expected to show that consumer prices rose by 7.5% year over year, the fastest increase on record. The manufacturing production data for February are expected to show a slight increase on Wednesday.

On Friday, the Eurozone and the UK will release PMI data to shed some light on how the war in Ukraine affects the economy. Additionally, the UK is due to publish March retail sales data on the same day, which is expected to show an increase in retail sales.

US economic data 

The US economic calendar is relatively light this week, with several updates on the housing market. Building permits and housing starts data will be released on Tuesday, followed by a Wednesday report on existing home sales.

The latest development on the housing data will be closely followed, as US mortgage rates are on the rise due to higher market interest rates.

The Philadelphia Fed manufacturing index and the weekly initial jobless claims report will be released on Thursday. Friday's data will reveal manufacturing and service sector activity.

Gold climbs to retest 2000

The price of gold climbed to its highest level since mid-March on Monday, as the Russian-Ukrainian crisis soured investor sentiment and caused them to flee to the safe-haven asset. 

Gold will likely test $2,000 again in the near future, but $2,100 is a more significant and potent figure to watch because it contains some crucial peaks that need to be broken before gold can sustain long-term gains.

Highly expected earnings season

This week, the US earnings season will get underway. However, fears over persistently high inflation, a hawkish Federal Reserve, and the uncertainty resulting from the war in Ukraine will likely keep markets on edge. 

US corporate earnings are forecast to be stronger than expected this year, supporting some market sectors like banks, travel firms, and companies that benefit from a growing economy.