Dollar retreated mildly following comments from two FOMC members, including a known hawkish figure, reiterating expectations for three interest rate cuts within the year. Despite this, the retreat remains subdued as there is no guarantee yet for a June cut. Fed's approach continues to be heavily influenced by incoming data. The greenback's next move will hinge on today's ISM Services data, as well as Friday's Non-Farm Payrolls.
Asian equities were a sea of red overnight as strong US economic data lowered US Fed cut probabilities, along with spiking oil prices on Middle East tensions.
In the euro area, today's focus is on euro area inflation for March. We expect inflation to come in at around 2.4% y/y which is slightly below the consensus forecast of 2.5% due to the recent downside surprises in the four biggest economies. Inflation is likely to decline due to falling food inflation and core goods.