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EUR/CHF stayed in sideway trading last week and outlook is unchanged. Rise from 0.8979 is expected to continue as long as 0.9155 cluster support (38.2% retracement of 0.8979 to 0.9264 at 0.9155) holds. On the upside, firm break of 0.9264 will target 0.9394 resistance next. However, break of 0.9155 will turn bias back to the downside for deeper pullback to 61.8% retracement at 0.9088 and possibly below.

In the bigger picture, considering bullish convergence condition in W MACD, a medium term bottom should be in place at 0.8979. Sustained trading above 55 W EMA (now at 0.9272) will add more credence to this case. Further break of 0.9394 resistance will pave the way to 0.9660 resistance next. However rejection by the 55 W EMA will set up another fall through 0.8979 low at a later stage.

In the long term picture, outlook will stay bearish as long as 0.9407 support turned resistance (2022 low) holds. However, firm break of 0.9407 will argue that the down trend from 1.2004 (2018 high) has completed with five waves down to 0.8979. Stronger rebound should then be seen to 38.2% retracement of 1.2004 to 0.8979 at 1.0135 in the medium term.

• Discover our Weekly Market Outlook, exploring themes and events that forged financial flows throughout the week.
• Stock Markets just reached new all-time highs but Investors are awaiting for fundamental confirmation before moving on the the next phase, including April NFP and more news regarding Iran and US talks
• Get ready for next week's action by exploring upcoming events across global Markets.

Week in review – Earnings break records, pulling Markets higher

US Stock Markets, particularly the Nasdaq and S&P have continued their relentless paths to fresh all-time highs, but the euphoric momentum is now somewhat stalling.

Investors are anxiously awaiting fundamental confirmation before committing to the next phase of this historic rally.

Nasdaq Daily Chart – May 1, 2026 – Source: TradingView

All eyes are now turning to the upcoming April Non-Farm Payrolls (NFP) report, while the trading floor remains desperate for concrete progress in the stalled US-Iran diplomatic talks.

Without a definitive breakthrough, global assets remain trapped in a geopolitical limbo that is actively preventing major new trends from developing.

This week did deliver some great news for Stock Markets: Tech earnings delivered yet another blockbuster round.

The reporting Magnificent 7 heavyweights—Amazon, Apple, Meta, Microsoft, and Google—all posted record-breaking revenues.

However, the sheer, unprecedented scale of the ongoing AI capital expenditure boom is still frightening investors. With Stock valuations currently stretched to extreme limits, the tech titans will have to continue beating records again and again to make sure that they can maintain their high P/E pricing.

Meanwhile, the broader macroeconomic backdrop remains highly complex and weighting on general sentiment. WTI Crude bounced back above the $100 throughout this week, adding renewed inflationary fears for the coming months.

WTI 4H Chart – May 1, 2026 – Source: TradingView

Yet, after a pivotal week featuring five major central banks (the BoE, BoC, BoJ, Fed, and ECB), aggressive rate hikes remain notably absent from their forward guidance, despite heavy expectations for the worst.

The lack of hawkish talks sparked a strong wave of relief trading: The US Dollar shot aggressively lower following Jerome Powell's final press conference, providing a lucrative tailwind for other FX majors and precious metals.

However, with Energy prices still grinding higher, a reality check could be imminent.

Stock markets remain at center stage, and next week will determine whether equities can continue surfing on record earnings, or if mounting macroeconomic and geopolitical anxieties will ultimately dampen their historic progress.

As said last week, an actual deal will be mandatory to sustain the rally.

Weekly Performance across Asset Classes

Weekly Asset Performance – May 1, 2026 – Source: TradingView

Oil somehow rampaged again this week, but what really stands out is the fact that Global Markets really seem to have turned the page on its inverse correlation with other assets.

You can see for yourself: Both the Nasdaq and the Dow Jones are up another ~1-2% throughout the week despite the 5% rise in Petrol, and while Gold continued to pullback, Silver managed to remain unchanged.

Overall, this hints at further uncertainty in Markets, and traders are now treating each asset class individually (with many consolidation ranges), as the World awaits for further geopolitical news.

The Week Ahead – Key Labor Market reports

Asia Pacific Markets – Royal Bank of Australia Rate Decision and NZ Employment

A few data points should be adding fuel to the nascent fire that gripped Forex Markets this week; A fire that has started with the Central Bank rate decisions and magnified with the Verbal Intervention from the Japanese Ministry of Finance.

Next week, without counting the US Dollar, the Aussie and New Zealand Dollars will be facing key tests with the back-to-back RBA meeting (no hikes priced, but communications will be closely watched) and New Zealand Employment data on Tuesday.

There will be a few mid-tier releases also, including the Bank of Japan minutes (potential mover), PMIs for Australia and Trade data for China.

Europe and UK Markets – PMIs and Inflation reports

The CHF will surely get the most attention next week, with Swiss inflation report (Tuesday) still a major contributor to FX volatility.

While Energy inflation should contribute to less chances of rate cuts for the Swissie, traders will have to remind that any huge strengthening could be met with currency intervention from the Swiss MoF.

The Eurozone will also be releasing their fair share of new data, including the Eurozone PPI and PMIs.

Euro Traders should also keep an eye on Thursday's Retail Sales and key speeches from Madame Lagarde, as they could either confirm or deter the fresher pricing for rate hikes at the upcoming meeting (June 11).

North American Markets – Huge releases and speeches

North America comes back to steal the show, with heavy Central Bank speeches and Employment releases.

Monday starts the show with Fed's Williams delivering an address (Monday 12:50 ET) – and he currently is the most influential speaker at the Federal Reserve so watch out for his tone (which could well enough dictate the next rate decision, as seen in November).

Not mentioning a few PMIs for the US (ISM Services on Tuesday) and Canada (Ivey PMIs on Wednesday), traders will be all eyes and ears for the Employment data releasing from Tuesday to Friday.

This includes the classic, mid-tier ADP Private Data, but most importantly, the Canadian and US Payrolls.

The effect of the war on the economy is starting to be felt, so major surprises could create significant spikes in the action after relatively dull weeks.

We will publish a preview, but what you have to remember is to focus particularly more on the Unempl

Next Week's High Tier Economic Events

Next week's Economic Calendar – Courtesy of TradingEconomics

Safe Trades and keep an eye on US-Iran talks!

• The Ministry of Finance (MoF) intervened on April 30 and May 1, 2026, after the USD/JPY pair breached the critical 160.00 level.
• The aggressive yen-buying action, estimated to be over $30 billion, triggered a sharp 2.2% rally in the yen, driving the pair down toward the 156.00 range.
• Historical precedent from the 2024 intervention suggests unilateral action is only temporary, serving to "buy time" rather than reversing the trend without fundamental economic shifts.
• The immediate outlook calls for heightened volatility and sideways consolidation, with key levels to watch being 157.89–158.00 (resistance) and 156.27 (support).

USD/JPY pair has undergone a violent shift in sentiment over the last 48 hours. After flirting with the psychological 160.00 handle, the pair was met with what appears to be aggressive yen-buying intervention (or the high-stakes threat of it), sending the pair into a tailspin.

According to reports, the Japanese Ministry of Finance (MoF) intervened in the foreign exchange market on April 30 and May 1, 2026, to defend the yen after it breached the critical 160 per dollar level.

The scope of the action involved selling US dollars and buying yen to punish speculators and curb excessive volatility. While official figures are typically released later, initial estimates suggest a massive scale, potentially exceeding $30 billion similar to the 2024 intervention.

The move successfully triggered a sharp 2.2% rally in the yen, briefly driving USD/JPY down toward the 156.00 range. As we head into the weekend, the technical landscape has shifted from a one-way bullish street to a complex battleground of massive volatility.

The question now is, what comes next for USD/JPY?

What comes next for USD/JPY

I thought that it may be appropriate to look at the most recent response to FX intervention by the Japanese Ministry of Finance.

The 2024 intervention campaign by Japanese authorities resulted in a sharp but ultimately temporary correction for the USD/JPY pair.

By executing over $30 billion in dollar sales during the thin liquidity of the May Day holidays, the Bank of Japan successfully drove the exchange rate down to a low of 152.00. However, this success was short-lived, as the intervention only served to "buy time" rather than reverse the underlying trend. Within two months, USD/JPY had recouped its losses and climbed to new highs, driven by persistent fundamental factors such as high energy prices, a hesitant Bank of Japan, and a hawkish Federal Reserve.

Consequently, the 2024 experience serves as a cautionary precedent, suggesting that while unilateral intervention can trigger significant immediate volatility, it struggles to sustain long-term currency strength without a shift in broader economic conditions or support from Washington.

Will we see a similar reaction this time around as the US Dollar Index (DXY) continues to hold the high ground? Let us take a look at the technical picture.

The Daily Chart: A Monumental Rejection at 160.00

On the daily timeframe, the narrative is dominated by the massive "blow-off" top and the subsequent rejection of the 160.00 level.

For weeks, the 160.00 mark acted as the proverbial line in the sand, and the price action suggests that the market simply flew too close to the sun.

The daily candle following the peak is a stark reminder of the "intervention risk" that has been looming over this pair. We have seen a break back below the short-term 50-day MA (black line) at 158.58 and 100-day MA at 157.28 (yellow line).

More importantly, the pair is testing the resolve of the 157.89 horizontal support level.

The RSI on the daily has sharply retreated from overbought territory, suggesting that the parabolic move has been neutralized.

However, the long-term bullish trend remains technically intact as long as the pair holds above the major ascending trendline (currently sitting near 154.50) and the 200-day MA (blue line) far below at 154.00.

USD/JPY Daily Chart, May 1, 2026

Source: TradingView (click to enlarge)

The H4 Chart: Consolidation Following the Crash

Moving down to the H4 chart, we can see the sheer velocity of the move. The pair plummeted from 160.00 down to a low near 155.50 in a matter of candles. Since that "flash crash," we have seen a period of volatile consolidation.

Currently, USD/JPY is sandwiched between the 156.27 support level and the 157.89 resistance level. The 50, 100, and 200 MAs are all beginning to cluster and point lower, acting as a ceiling for any immediate recovery attempts.

The H4 RSI shows a "Bull" divergence signal recently formed near the lows, which explains the modest bounce we are seeing back toward 157.00.

For the bears to regain full control, they need a clean break and close below 156.00.

USD/JPY Four-Hour Chart, May 1, 2026

Source: TradingView (click to enlarge)

The H1 Chart: Intraday Tug-of-War

The H1 chart highlights the immediate "ping-pong" price action. After the initial drop, the pair found support at 156.27 and has since been making a series of higher lows, but it is struggling to clear the 158.00 handle.

Notice how the MAs on the H1 (50,100 and 200) have crossed over into a bearish alignment, with the price currently trading below the 50-period MA (158.01). This suggests that every "relief rally" is being met with fresh selling interest from traders who missed the initial move or those hedging against further BOJ (Bank of Japan) surprises.

The Outlook and Key Levels

The outlook for USD/JPY remains exceptionally clouded by fundamental intervention risk, which often overrides technical setups. However, looking at the levels:

• Resistance: The immediate hurdle is 157.89–158.00. A break back above this could see a retest of the 159.00 region, where the SMAs will likely offer stiff resistance.
• Support: To the downside, 156.27 is the immediate floor. A breach here opens the door for a move toward the 155.00 psychological level and the primary ascending trendline on the daily chart.

USD/JPY One-Hour Chart, May 1, 2026

Source: TradingView (click to enlarge)

While the long-term trend is still technically bullish, the 160.00 rejection was a "shot across the bow." Traders should expect heightened volatility and "gap" risks. I am leaning toward a period of sideways consolidation as the market digests whether the BOJ is finished or if another leg of yen strength is imminent.

• US Stock Markets are continuing their breakouts to ever-fresher highs, but short-term profit-taking seems to be ruining the party
• The Dow Jones could retake 50,000 in today's session barring no weekend-safety trading
• Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

US Stock Markets have been on a rampage after this week's earnings, and this trend is pushing Indexes to some new highs.

Yesterday saw the return of traditional assets demand, sweeping everything on their way and taking the Dow Jones up 1,000 points in one session, propelled by Caterpillar and Eli Lilly.

As the week concludes, the rally is now more broad based, with all US Indexes rising by similar percentages – Some signs of fatigue could be appearing, with some pullbacks from morning highs.

Daily Stock Market Index Performance – May 1, 2026. Source: TradingView

The only main concern that traders could see is the inability from Bulls to break the 50,000 level – If this level breaks in the afternoon session, this will bring with it further optimism signs for next week's action.

Markets just received the US Manufacturing PMI report for April, and while it did not ease much, there are still concerns of the Index being driven by fears of supply droughts, hence pre-emptive orders all around the sector – The report came in at 52.7, the same as last month.

Manufacturing PMI Data – MarketPulse Economic Calendar

Overall, with the earnings season continuing to break records and the Federal Reserve reluctant to turn to hikes, the only catalyst left to bring Markets lower is the absence of solution between Iran and the US.

The situation has been in a deadlock since the first round of talks failed, with the Ceasefire extension bringing back some life into dull Markets but no solution on the horizon.

Crude Oil was falling off a cliff in early Morning trading but is not bouncing back higher, unable to break below $100 per barrel – Some concerns on that part, particularly with the price action looking more cloudy as the session continues.

Crude Oil 1H Chart – May 1, 2026 – Source: TradingView

The drop in Crude Oil after the announcement of a new Iranian proposal has now begun to reverse to the upside – For Stock Markets to continue to rally, a break of the $100 level will be mandatory (look at the 200-Hour MA).

Let's dive right into intraday charts and trading levels for the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500.

Current Session's Stock Heatmap

Current picture for the Stock Market (11:09) – Source: TradingView – May 1, 2026

The Stock Market is now back into hesitant trading territory – Healthcare, traditional manufacturing sectors and Energy are lagging after the Manufacturing PMI small miss.

Only a few names are doing the heavy lifting to pull Markets higher, including Apple, Oracle, Intel and Tesla.

Dow Jones 4H Chart and Trading Levels

Dow Jones (CFD) 4H Chart – May 1, 2026 – Source: TradingView

After wicking very close to 50,000, the Dow Jones is forming an intraday nasty looking double top.

Sellers are taking control of the intraday momentum, so this could accelerate towards the late weekly session. A break of 49,750 could see further selling towards the 4H 50-period MA (49,300).

Dow Jones technical levels for trading:

Resistance Levels

• Morning highs 49,980
• 49,900 to 50,000 Resistance and Early 2026 Highs (rejecting)
• ATH resistance 50,400 to 50,500
• All-Time Highs 50,544

Support Levels

• 4H 50-period MA (49,300)
• Major Pivot – 49,000 to 49,200
• Momentum Support 48,500 (short-term bearish below)
• Pivotal Support at 48,000
• Mini Support 47,400 to 47,600

Nasdaq 4H Chart and Trading Levels

Nasdaq (CFD) 4H Chart – May 1, 2026 – Source: TradingView

Unlike the Dow Jones, Nasdaq hasn't formed any sign of bearish reversal, running towards the 28,000 level, sustained by huge performance from Apple and Intel.

Check out reactions to the psychological level if the action manages to reach the level.

Any rejection below 27,500 could see a swift retest of the 27,100 4H 50-period MA – Watch out as reversals tend to happen fast these days.

Nasdaq technical levels of interest:

Resistance Levels

• 28,000 Major psychological resistance (and channel highs)
• Daily highs 27,850

Support Levels

• 27,500 micro-resistance now pivot
• Momentum Pivot at 27,000 (4H 50-period MA)
• Mini-support 26,600 to 26,750
• Prior ATH Support 26,200 to 26,300
• War Support 25,000 to 25,250
• Early 2025 ATH at 22,000 to 22,229 Support

S&P 500 4H Chart and Trading Levels

S&P 500 (CFD) 4H Chart – May 1, 2026 – Source: TradingView

The S&P 500 still evolves within its low-slope bull channel, and has now just tested its upper bound.

Momentum still looks strong for the index, but reaching overbought levels, it will be interesting to see if the Index resists to the pressure seen in the DJIA.

Above this, look for 7,300 – Rejecting here however hints at a test of the channel lower bound (7,150).

S&P 500 technical levels of interest:

Resistance Levels

• Mini-channel highs and daily top 7,260
• Potential resistance 7,300

Support Levels

• 7,100 psychological level and 4H 50-period MA
• Prior ATH Pivot 7,000 to 7,020
• Minor Support 6,880 to 6,900
• Pivotal Support 6,750 to 6,770
• 6,300 psychological level (War lows)

Keep track of WTI Crude and the latest headlines throughout the weekend to stay ahead of the curve, with investors still confused about US-Iran negotiations.

Safe Trades!

Canadian Highlights

• March CPI came in a touch softer than expected, with headline inflation jumping to 2.4% on higher gasoline prices but shorter-term core measures are still, on average, running below 2%.
• The first quarter BoC Business Outlook Survey signaled improving pre-war sentiment, but noted rising input costs and some upward drift in inflation expectations since the onset of the conflict.
• With war-related uncertainty elevated and inflation expectations a key area of focus, the BoC is likely to remain on hold next week while reiterating its commitment to keeping expectations well anchored.

U.S. Highlights

• Iran signaled a reopening of the Strait of Hormuz amid a fragile ceasefire, easing oil prices and lifting markets, though evidence of a full normalization in shipping remained limited.
• Retail sales rose sharply in March, boosted by higher gasoline prices but also supported by solid underlying volumes, pointing to continued consumer resilience.
• Business surveys showed activity stabilizing even as war-related supply disruptions pushed price pressures higher, complicating the policy outlook.

Canada – Well Behaved Core Inflation Strengthens BoC Hold Case

The fluid Middle East situation continued to drive Canadian financial markets. Oil prices remain volatile, with WTI up this week amid limited progress on diplomatic efforts between Iran and the U.S. Canadian bond yields also edged higher (as of writing), with Middle East tensions keeping inflation risks in focus. Since the onset of the war, the 10-year bond yield is up about 35 bps.

This week’s data offered a largely pre-war read on momentum and an early look at inflation spillovers. Retail sales rose in February and Statistics Canada’s flash estimate points to another gain in March. For the Bank of Canada, though, March CPI was the focal point. Headline inflation rose 0.6 ppts to 2.4%, driven by the recent jump in gasoline prices, but the details were modestly softer than expected. For instance, shorter-term core metrics firmed on the month, but remained below 2%, on average (Chart 1). Gasoline prices have been more contained through April, while the federal government has temporarily removed the excise tax on fuels. Still, year-over-year inflation should get a mechanical lift from base effects tied to the April 2025 carbon-tax cut.

The Bank of Canada’s Q1 Business Outlook Survey (BoS) was conducted largely before the war, with only a smaller share of responses collected afterward. Pre-war results showed sentiment improving as firms are adjusting to U.S.–Canada trade frictions. In the background, the CUSMA review is now underway. U.S. and Canadian officials flagged several irritants this week - including U.S. tariffs on Canadian aluminum/steel/autos/lumber and provincial restrictions on U.S. alcohol sales - that will shape negotiations. Multiple parties also suggested the original July 1 deadline is unlikely to be met.

Firms surveyed post-war in the BoS reported only modest impacts on activity measures so far, but flagged rising input costs. The ability of firms to pass through higher costs was mixed, constrained by lackluster demand and increased competition.

Next week brings the release of the federal government’s Spring Economic Update. Last November’s budget pegged the FY 2026/27 deficit at a lofty 2.0% of GDP. This shortfall would also be at the higher end compared to provincial expectations this budget season. However, this year’s outlook for nominal GDP (which drives government revenues) will likely be revised up relative to last November. The update may also be light on substantial net new measures, as several had already been announced, like the grocery rebate top-up.

Attention turns to the Bank of Canada’s rate decision next week. The Bank is widely expected to stay on hold - our call as well. With the economic fallout from the war still highly uncertain, it would be premature to pivot from a hold, particularly with core inflation still well behaved. That said, the BoS points to some upward drift in shorter-term inflation expectations, though long-term measures remain well anchored (Chart 2). Expect the Bank to stress its willingness to act as needed to keep expectations anchored.

U.S. – Markets Jitter, Prices Bite

As the Iran conflict approaches the two month mark, financial markets remained highly sensitive to signals around energy supply risks. Early in the week, Iran announced that the Strait of Hormuz would be reopened to commercial shipping vessels during a newly brokered ceasefire, triggering a sharp pullback in oil prices and a relief rally in risk assets. WTI crude fell into the low $80s per barrel range, while U.S. equities moved to new highs as immediate worst case supply scenarios were priced out (Chart 1). That said, reporting around actual shipping flows suggested that conditions on the ground were uneven. As a result, while near term fears eased, geopolitical risks remain elevated and sentiment fragile, leaving markets vulnerable to renewed volatility should tensions re escalate.

U.S. economic data this week offered a reminder that domestic momentum has not yet broken down. Retail and food services sales rose 1.7% in March, driven largely by a surge in gasoline prices, but importantly, real (inflation adjusted) spending also increased a solid 0.8%. Core retail sales excluding gasoline, autos, and building materials posted broad-based gains, suggesting that households have not yet pulled back meaningfully on goods consumption. One area of softness was spending at restaurants, which was little changed on the month, highlighting some emerging price sensitivity among consumers.

Forward-looking indicators painted a more mixed picture. The latest U.S. PMI readings showed business activity recovering modestly in April after stalling in March, with manufacturing rebounding more strongly than services. However, the rebound was accompanied by worsening delivery times and a sharp increase in input and output prices, reflecting ongoing supply disruptions tied to the conflict. Firms reported precautionary stock building and rising costs, reinforcing concerns that inflation pressures could re-intensify. The University of Michigan survey released today showed inflation expectations over the next year rising sharply, a key indicator energy-driven price worries are becoming more entrenched (Chart 2).

Markets are also increasingly focused on the Federal Reserve policy backdrop. Kevin Warsh’s confirmation hearing this week underscored uncertainty around the future policy framework, with investors parsing how shifts in leadership could influence the Fed’s reaction function at a time when inflation and growth risks are pulling in opposite directions. While Warsh’s confirmation by the Senate Banking Committee was uncertain amid the ongoing DOJ investigation of Chair Powell, headlines on Friday morning suggested the charges had been dropped. This clears a path for Warsh’s confirmation, which means next week’s interest rate announcement will likely be Jerome Powell’s last as chair. Looking ahead, next week’s data calendar is heavy, with personal income and PCE inflation, first quarter GDP, and ISM surveys all due. Together, these releases will help determine whether the economy is slowing enough to offset renewed price pressures.

The U.S. labor market remains soft with the “low fire, low hire” environment continuing. We expect payroll growth to step down to around 70K in April, with a rebound in labor force participation pushing the unemployment rate back up to 4.4%. Globally, central banks are diverging. The Fed is firmly on hold in the wake of the continued conflict in Iran. But we now expect the Reserve Bank of Australia to deliver a third consecutive rate hike, prolonging their hiking cycle, and Canada’s labor market to stabilize, supporting a July rate hike as inflation pressures return to focus. In emerging markets, we expect Banxico to cut the policy rate by 25 bps next week to 6.50%, likely in a split decision, even as inflation risks remain tilted to the upside.

United States:

• Employment (Friday)

G10 Economies:

• Reserve Bank of Australia Policy Rate (Wednesday), Canada Labor Force Survey (Friday)

Emerging Markets:

• Banxico Policy Rate (Thursday)

U.S. Week Ahead

Employment • Friday

The labor market is still stuck in the low fire, low hire dynamic that has prevailed for the past two years. While layoffs at well-known tech companies made headlines in recent weeks, initial jobless claims, WARN notices and Challenger job cut announcements point to economy-wide layoffs remaining tame for now. Yet, firms still show little appetite to hire additional workers. Small business hiring plans are sitting at a two-year low, regional Fed employment PMIs sank further into negative territory in April and Indeed job postings—which had been on an upswing since the start of the year—wobbled in March.

With demand for workers little changed, the supply of workers has become a bigger factor in the pace of job growth. Last month's 178K rise in payrolls, even accounting for the ~30K boost from completed strikes, is untenable given the immigration and demographic constraints on labor force growth. We expect some payback in April and estimate total payrolls advanced 70K, with private payrolls up 75K.

The April unemployment rate is also like to point to a slightly softer jobs market. Last month's drop to nearly 4.2% (4.26% unrounded) was driven by a swath of unemployed workers leaving the labor force. We look for a rebound in the labor force and ranks of the unemployed in April to push the unemployment rate back to 4.4%. That would leave the unemployment a tick higher than what most FOMC members estimate is full employment—uncomfortable amid an uncertain demand backdrop, but not indicative of the labor market's delicate balance tipping in April.

G10 Week Ahead

Reserve Bank of Australia Cash Rate • Wednesday

We expect a third consecutive 25 bps rate hike from the Reserve Bank of Australia (RBA) next week, lifting the Cash Rate to 4.35%. Further, we see the RBA prolonging its hiking cycle through mid-year, a shift from our prior view of rates on hold through end-2026. At its March meeting, the RBA stressed that with inflation still too high, the question of raising rates was about “timing rather than direction.” Recent communication reinforces that message, with greater emphasis on anchoring long‑term inflation expectations. Deputy Governor Hunter described this as being a central bank's ‘North Star’, while Governor Bullock, at the March meeting, stated that anchoring long-term inflation expectations depends on convincing households and firms the RBA “would take action to bring inflation back to target.” While March headline CPI rose 4.8% year-over-year due largely to fuel prices, the print undershot expectations and trimmed mean inflation held at 3.3%, pointing to moderating core inflation before the Middle East conflict. That dynamic, however, is likely to shift over the next months, with April PMIs showing the fastest rise in input costs in over four years.

With the labor market tight, inflation above target and the economy starting from a relatively strong position, policymakers appear focused on near-term action. As this meeting includes an updated Statement on Monetary Policy, it should clarify how much higher inflation is expected to run by the RBA and what that implies for the path ahead. While the outlook beyond May is less certain after three hikes, risks have shifted to the upside. We now see scope for another increase (most likely in June but could be delayed to August), taking the Cash Rate to 4.60%, with the possibility of higher rates if the conflict continues and inflation pressures intensify.

Canada Labor Force Survey • Friday

We expect further improvement in Canadian labor market data next week, with employment rising by around 25K in April and the unemployment rate ticking down to 6.6%. The April report should confirm the stabilization in labor market conditions seen in March. We expect job gains to be concentrated in full-time employment and led by goods-producing sectors, particularly energy and mining. Demographics and net migrant outflows continue to point to weak labor force growth and subdued participation rates. This is pushing down the breakeven pace of job growth needed to keep the unemployment rate stable, potentially into slightly negative territory. As a result, we expect the unemployment rate to drift gradually lower over the course of 2026.

On net, stabilization in labor market conditions shifts the balance of risks for the Bank of Canada back toward inflation. This week’s meeting emphasized USMCA-related uncertainty as a near-term dovish risk. However, we continue to expect a Bank of Canada rate hike at the July meeting, assuming the July 1 deadline passes with a muddle-through outcome, policymakers gain further evidence of inflation pass-through and the Bank delivers a refreshed July Monetary Policy Report.

EM Week Ahead

Banxico Policy Rate • Thursday

We expect Banxico to cut the policy rate by 25 bps next week to 6.50%, with the window for further easing now rapidly closing. We anticipate a 3–2 decision, with the dovish majority leaning heavily on softer activity data. Economic momentum weakened sharply in Q1, with GDP contracting 0.8% quarter-over-quarter and growth barely positive on a year-over-year basis. Retail sales, labor market indicators and downward revisions to services output all point to a loss of momentum early in the year. Q2 should improve mechanically, but this is more likely to reflect stabilization than a meaningful rebound. Inflation dynamics remain problematic. Both headline and core inflation are around 4.5% year-over-year, with core inflation having remained above 4% for nearly a year, well above the upper bound of Banxico’s 2–4% target range. Non-core inflation is likely to re-accelerate in coming months as higher food and energy prices feed through, reflecting Middle East developments and adverse agricultural conditions. Inflation risks are therefore clearly skewed to the upside, leaving Banxico’s dovish bias increasingly out of step with inflation realities.

A final rate cut in Q2 appears likely, particularly given recent comments from Governor Rodríguez and Deputy Governor Mejía. As in the March meeting, we expect Deputy Governors Borja and Heath to dissent in favor of holding rates steady. Looking beyond, the macro mix for H2 2026 is unfavorable, characterized by low trend growth, elevated inflation, limited fiscal support, and fragile monetary credibility. A key risk event later this year will be the replacement for Heath, whose term ends in December. A technocratic appointment would be viewed positively by markets and help contain risk premia in both rates and FX. Absent that, we see weak growth and Banxico’s dovish bias weighing on the peso, while credibility concerns are more likely to lift term premia in local rates.

Monday, May 4, 2026

Tuesday, May 5, 2026

Wednesday, May 6, 2026

Thursday, May 7, 2026

Friday, May 8, 2026

Canadian labour market data for April next Friday will be in focus, and we expect employment to remain broadly consistent with a gradual improvement in per-worker conditions after controlling for an unprecedented pullback in labour force growth.

We expect about 25,000 jobs were added in April following losses in January and February that only partially recovered in March.

That would still leave employment down 70,000 in the first four months of 2026, but would also likely still be enough to push the unemployment rate down to 6.6% from 6.7%—further below the recent 7.1% peak in August and September 2025.

We have discussed before how aggressive federal immigration caps and an aging population have sharply lowered the amount of employment growth needed to push the unemployment rate (the better indicator of per-worker labour conditions) lower.

Details of recent labour market reports have also not been as soft as headline employment growth numbers imply. Specifically:

• Weakness has been largely contained to trade-exposed sectors with little evidence of spreading. Employment in sectors heavily exposed to U.S. trade (with 35% or more jobs due to demand from the U.S.) have declined 3% since February 2024, while other sectors grew by 1%.
• Permanent layoffs have declined. Early 2026 job losses were not driven by permanent layoffs, which have fallen since October 2025. Instead, temporary layoffs and future starts (workers with a future job start date, but still technically unemployed) account for recent increases.
• No signs of “hidden” unemployment. The unemployment rate provides a “clean” read of per-worker conditions only if discouraged workers are not giving up their jobs or being pushed into part-time work when they would rather have full time jobs.
• Still, broader unemployment measures like R-8, which include such workers (discouraged and involuntary part-time workers) remain aligned with the official rate. Both measures have been relatively unchanged from a year ago, indicating weakness is not masked beneath the surface.
• Business sentiment is brightening. The Bank of Canada’s Business Outlook Survey, conducted in February, revealed strengthening hiring and investment intentions. Businesses reported plans focused on productivity gains and capacity expansion, reflecting a healthy rebound in household spending in 2025, and substantial improvement in trade uncertainties.

The labour market is not yet strong: Unemployment rate declines have still been modest to date, and we don’t expect a spike in wages in March will be repeated in April.

But, our base case projections assume further gradual improvements this year with the unemployment rate edging down to 6.3% by year end even with job growth softer than historically normal.

Canadian international trade data has been exceptionally volatile, but the merchandise trade deficit should narrow in March with a 40% surge in oil prices due to the Middle East conflict pushing the energy surplus higher. We look for exports to rise almost 5%, and imports to post a smaller 1.5% increase, pushing the trade deficit down to -$3.8 billion from -$5.7 billion in February.

We expect U.S. nonfarm payrolls added just 26,000 jobs in March—a number that, given current conditions, represents breakeven growth and has become routine. With shrinking labor supply, the U.S. does not need substantial job additions to maintain a steady unemployment rate. A meaningful decline in continuing claims between the March and April reference weeks supports our expectation that the unemployment rate will hold steady at 4.3% in March.

Crude oil prices continued higher this week as the market is becoming increasingly sceptical about the prospect of a near-term opening of the Strait of Hormuz. This pushed yields higher until the peak was reached and oil prices dropped sharply again on Thursday. The oil crunch has also triggered some action in the FX market where Japanese authorities intervened to support the yen for the first time since July 2024. Looking ahead, the UAE's decision to leave OPEC creates a bearish outlook for oil prices, when oil starts to flow through the strait again.

The Fed kept rates on hold at Powell's last meeting as chair. The takeaway for markets was to the hawkish side as three participants dissented against the Fed's current easing bias and Powell decided to stay on as governor which blocks Trump from nominating a dovish replacement. This means the exit of Stephen Miran, when Kevin Warsh replaces Powell as Fed chair after the Senate Banking Committee finally advanced his nomination this week. Further, Powell specified that the majority of the FOMC did not want to send a signal that a hike would be equally likely as a cut.

Growth was slightly on the weak side of expectations in Q1, as US q/q GDP growth, fuelled by a reopening of the public sector, ended up at 0.5%, on steady but cooling private consumption. The euro area almost came to a standstill at 0.1% on the back of disappointing French growth and volatile Irish data.

The EU Commission's April surveys highlighted the dilemma the ECB is faced with, and which the PMIs also reflected last week. They showed inflation expectations have surged among businesses and consumers, but confidence is declining. Noticeably service sector employment expectations recorded the steepest decline since the early pandemic shutdowns. So far, actual inflation shows no signs of broader price pressures. Core inflation even edged lower to 2.2% in April as service inflation declined to 3% for the first time in four years. Headline inflation on the other hand increased to 3%, digging into consumers' purchasing power. ECB president Lagarde is "certainly not seeing second-round effects" as she put it after the decision to keep rates on hold. A rate hike was debated but the decision was unanimous.

The Bank of England also held rates steady with an "active hold" decision, as Governor Bailey phrased it and did not push back on the hawkish market pricing as tighter financial conditions push the breaks on economic activity. Japan has for long been on a very slow-moving hiking cycle. The uncertain implications for the big energy importer caused the Bank of Japan to postpone further tightening for now. We expect them to hike their policy rate to 1% for the first time since 1995 in June. Elsewhere in Asia, Chinese exports remain the key growth engine highlighted by solid April manufacturing PMIs above 50 from both official and private measures. The non-manufacturing PMI on the other hand fell below 50 and the construction sector slowdown accelerated further, leaving the economy vulnerable to a global downturn.

Next week a whole string of labour market reports is published in the US, concluding with the jobs report on Friday, where we expect a solid 80K new jobs. We expect unemployment, which is more important for the Fed, to be unchanged at 4.3%.

Full report in PDF. 

Ethereum has slowly broken out of its October downtrend that had led to its progressive, but brutal 64% correction.

Global disinterest for high-beta, AI and Tech assets had shun interest for Cryptocurrencies but with the Conflict turning the script on Energy prices, hence normal consumption, traders slowly turned away from traditional assets.

The idea is that Digital Assets are fairly isolated from any rise on Crude Oil or Nat Gas, quite the contrary. Crypto mining is energy intensive; hence, with higher costs, mining gets less interest, so that provides a temporary supply restriction which has a boosting effect on Cryptos.

Since the beginning of the conflict, Bitcoin and Ethereum are up 20%, while the Total Market Cap is up just a bit less (~18%) – While there is still a lot to cover to return to all-time highs, this is strong progress; Bulls will want to keep pushing and they might just turn the trend around.

Crypto Total Market Cap – Source: TradingView. May 1, 2026

ETH/BTC – Bull flag formation?

ETH/BTC – Source: TradingView. May 1, 2026

The Second to First Crypto ratio is essential to track the appetite for Altcoins, key to depth in the Digital Asset Market as Bitcoin had taken a significant advantage since it started rallying to its first $100,000 trip – The initial drop in ETH in August 2025 marked a top in the ratio

Today, ETH/BTC is hanging right around the 3% level, which itself does not imply much about the state of the Crypto Market, however, a bull flag formation could bring some happy days for Alternative Coins.

Its target is at 6% of the Bitcoin price, hence that would signify a significant rally in Ethereum which tends to trigger altcoin rallies (except if Bitcoin slashes its value, but in the past, that often reduced the ratio in a flight to Crypto Safety).

Ethereum Technical Analysis

ETH Daily Timeframe

Ethereum Daily Chart, May 1, 2026 – Source: TradingView

Ethereum has now officially consolidated above its key $2,100 to $2,300 Pivot Zone and pushed above its downward Channel.

While momentum is still timid, a bounce from Neutral RSI, confirming with a nascent bull channel brings back higher odds to retest the $2,500 level (not seen since January).

ETH 4H Timeframe and Technical Levels

Ethereum 4H Chart, May 1, 2026 – Source: TradingView

Ethereum is forming an intraday tight bull channel after finding its bottom at the FOMC, right around the 4H 200-period MA.

Currently testing a break of a short-term top-line, bulls are already pushing above the 50-period MA and that provides the needed signs for continued upside.

To confirm, look for an hourly close above $2,330 which would hint to a rally to the top of the counter-trend bull channel ($2,520).

Levels of interest for ETH trading:

Support Levels:

• $2,100 to $2,300 June War Support Key Pivot
• $2,215 4H 200-period MA
• Channel lows $2,000
• $1,700 to $1,800 Pre-Bounce 2025 Key Support (testing)
• $1,744 February 6 lows

Resistance Levels:

• Trendline top $2,330
• $2,400 mini-resistance
• $2,500 to $2,700 June 2025 Key Support now Resistance (Channel Highs)
• $3,000 to $3,200 Major momentum Pivot (Test of the $3,000)
• $4,950 Current new All-time highs

Ethereum 1H Chart

Ethereum 1H Chart, May 1, 2026 – Source: TradingView

The shorter timeframe points to momentum slightly exhausting with a short-term double top and overbought RSI, but with this price action, the pull back should not extend much beyond $2,300.

Breaking the 50-Hour MA ($2,266) cancels out the bull attempt in would imply further consolidation in times ahead.

Safe Trades!