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Energy Pullback To Outweigh Potential Services Re-Acceleration

• The Eurozone April flash inflation round sees Spain kick off proceedings on Tuesday (April 29), before France, Germany, and Italy follow on Wednesday (April 30). With much of Europe closed for Labour Day on Thursday (May 1), the Dutch and Eurozone-wide releases come on Friday (May 2).
• MNI consensus is for the core rate to accelerate slightly to 2.5% (vs 2.4% prior), with the late timing of Easter potentially adding upside risks to travel-related services components. However, a pullback in energy prices is expected to more than offset this dynamic, helping headline HICP ease to 2.1% Y/Y (vs 2.2% prior).
• More stringent-than-expected US tariff policy and a dovish April decision has resulted in a dovish tilt for near-term ECB policy expectations. A 25bps cut at the next meeting in June is now fully priced in ECB-dated OIS, and there is 64bps of easing priced through December. That’s almost a full 25bp cut more than what was priced at the beginning of this month, prior to the US’s reciprocal tariff announcements.

• EUR/USD: Apr30 $1.1375-95(E2.4bln); May01 $1.1270(E1.1bln), $1.1500(E1.0bln)
• USD/JPY: Apr30 Y140.50($1.7bln), Y142.00($1.7bln), Y145.00($1.5bln); May01 Y143.00($1.2bln); Y147.50($1.2bln)
• AUD/USD: Apr30 $0.6115(A$1.1bln)

US Treasury Secretary Scott Bessent has issued a statement on social media touting "substantive movement" towards trade deals with India, South Korea, and Japan. 

• Bessent: "We are continuing to make substantive movement on negotiations with many of our trading partners. The negotiations with our Asian trading partners are going very well; the negotiations with the Republic of Korea have gone very well; [Vice President JD Vance's] negotiations with India went very well; and I think we've had some very substantial negotiations with our Japanese allies."
• In an interview with CNBC earlier today, Bessent indicated that the Trump administration is working on a standardised template for trade deals, but declined to disclose further details.
• If progress is seen to be made, the template to facilitate further delays to the implementation of 'reciprocal tariffs', scheduled to take effect in July, as comprehensive bilateral trade deals can involve years of negotiations.
• Bloomberg reported earlier that South Korea's Vice Industry Minister Park Sung-taek said Seoul will send a delegation to Washington this week for “working-level talks to follow up on last week’s progress," but agreeing to any package of measures before the June 3 presidential election is “theoretically impossible.” 
• Reuters reported that Japan's top trade negotiator Ryosei Akazawa said Tokyo's position 'has not changed' and Japan will continue to demand the full removal of US tariffs in a second round of negotiations scheduled for this week.