The Week Ahead Inflation Iran and Trumps China Visit

UBS shifts focus to upcoming global inflation data and US-Iran geopolitics, recommending specific FX pairs like long GBPCHF and short AUDNZD over broad directional bets.

Key Takeaways

• 1.Market focus shifts to April inflation data, with US headline inflation expected to rise to 3.6% while core remains steady at 2.6%.
• 2.Geopolitical tensions regarding the US-Iran conflict and Trump's visit to Beijing are key market drivers, though their impact on FX may be limited.
• 3.Directional FX trades are currently difficult; UBS prefers idiosyncratic pairs like long GBPCHF and short AUDNZD.

Table of Contents

• FX opportunities of the week
• Comments on select currencies and commodities
• Data calendar
• Global asset class preferences definitions
• Appendix

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