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The U.S. is expected to report modest inflation data in April, with headline CPI rising to 3.8% year-over-year and core CPI near 2.9%. This reflects energy-driven pressures spilling into food, services, and goods, while shelter inflation continues to decline. Retail sales are projected to grow by 0.7% month-over-month, primarily driven by discretionary spending. These figures suggest a mixed economic picture, with inflationary pressures persisting but showing signs of moderation. For markets, the data will influence expectations around Federal Reserve policy. A stronger-than-anticipated CPI could delay rate cuts, while weaker retail sales might signal cooling consumer demand. Traders will closely monitor how these numbers interact with broader economic indicators like employment and manufacturing data. The key focus will be on whether the Fed remains data-dependent or pivots toward easing, which could impact USD strength and global risk appetite.
