Super Central Bank Week Approaches: US-Iran Standoff Unresolved, Gold and US Stocks Face Tests

Next week, the global markets will see an unusually busy "Super Central Bank Week," with US-Iran tensions, multiple central bank rate decisions, US GDP and PCE data, and tech giants' earnings reports all happening in quick succession.

Regarding the Middle East deadlock, peace talks over the weekend between the US and Iran failed to make breakthroughs, with Trump canceling his envoy’s trip, citing Iran’s proposed conditions as "insufficient in sincerity."

Iran’s foreign minister has left Pakistan and stated that Iran will not accept US "maximum pressure." Currently, the Strait of Hormuz is essentially blockaded by Iran, while the US has fully sealed off Iran’s oil exports.

Analysts believe that until the situation becomes clearer, gold, US stocks, and the crypto markets may continue to fluctuate, and it’s unlikely they will hit new highs soon.

On the central bank front, the Federal Reserve will announce its rate decision on Thursday, with the market generally expecting rates to remain unchanged. Given that Powell’s term as Chair ends in mid-May, this is likely his last meeting, and the market is watching to see if he will stay on as a board member.

Moreover, the Bank of Japan, Bank of Canada, Bank of England, and European Central Bank will also release their decisions sequentially. Meanwhile, aside from the Canadian dollar supported by oil prices, the US dollar remains mainly influenced by the Middle East situation.

In terms of inflation data, the US Q1 GDP preliminary figures, March PCE (the Fed’s preferred inflation indicator), and April ISM Manufacturing Index will be released in a concentrated manner.

However, based on the current overall market conditions, energy price shocks are likely to cause related data to perform somewhat weakly. The Eurozone’s Q1 GDP and April inflation preliminary figures will also be released on Thursday; if inflation exceeds expectations, it could provide more basis for a hawkish stance from the European Central Bank.

Regarding the US stock market, the S&P 500 and Nasdaq hit new intraday highs on Friday, and next week’s tech giants’ earnings reports will determine whether this rally can continue. Analysts believe that retail investor funds have not yet entered in large scale, and if earnings surpass expectations, there is still room for further market gains.

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