The release of the minutes from the Bank of England’s April meeting – when they cut rates by 25bps to 5.00 percent – presents major event risk for UK markets, as they are likely to echo much of the same wary sentiment reflected in the Monetary Policy Committee’s press release following the meeting.

In a Bloomberg News poll of 32 economists, 75 percent expect the Bank of Canada to cut rates by 50bps on Tuesday to 3.00 percent, the lowest target rate since October 2005, as inflation pressures subside, credit markets tighten, and a probable recession in the US threatens the Canadian economy.

The Bank of Canada is widely expected to cut rates by 50bps on Tuesday to 3.00 percent, the lowest target rate since October 2005, as inflation pressures subside, credit markets tighten, and a probable recession in the US threatens the Canadian economy.

Given the marked slowdown and probable recession in the US, the Canadian economy is now more reliant than ever on domestic demand growth to keep expansion on pace.

The tight Canadian credit markets have remained a concern for the BoC. Therefore, the central bank will infuse another C$2 billion in liquidity into the market on April 17, when they purchase securities with treasuries.

Upcoming US data is anticipated to suggest that the economy is facing one of the Fed’s worst fears: stagflation.

On Tuesday, UK CPI figures are anticipated to show stronger inflation pressures, with the index expected to rise 0.6 percent in March from the month prior and 2.6 percent from a year earlier.

US economic data is expected to show that Advance Retail Sales rose 0.1 percent in March after plunging 0.6 percent during the month prior, but given the current economic scenario, this figure could prove to be disappointing.

With the US dollar still relatively weak against the majors, there are concerns that import price inflation will rise significantly.