FX.co ★ Inflation, events in Ukraine and possible strong growth in the US will drive the global markets this week

Global markets continue to slide into a deep recession because of sky-high inflation and more aggressive actions by central banks, especially the Fed. There is also the ongoing conflict in Ukraine, as well as worsening data in Germany, China and the US.

It appears that investors have already come to terms with the fact that the Fed will take a more radical decision at the upcoming meeting, that is, to raise the key interest rate immediately by 0.5% to 1.0%. But even if the market is already leaning towards such a decision, the sharp rise in the cost of borrowing can lead to a new wave of sales on the US stock market.

Meanwhile, the yield on 10-year bonds resumed trading today, growing by 2.07% to 2.866%. This could lead to an increase in demand for dollar despite the Fed's plan to sell its bond portfolio. However, in the long term, there is a high chance that dollar's status as a global reserve will gradually decline.

In any case, USD will most likely soar before the Fed meeting, thanks to the more vigorous rate hikes by the central bank.

As for Europe, Easter holidays continue, so local trading floors will remain closed. Expect movement only during the US trading session.

Forecasts for today:

AUD/USD is trading above 0.7350. A break below will lead to a fall towards 0.7300, but there is also a possibility of a rise to 0.7380, from which the pair could push back and rush to 0.7300.

USD/JPY is above the strong resistance level of 125.60. Price could undergo a correction and move towards 127.60.