Investors will be looking for hints on the near-term course of interest rates in the United States inflation statistics and Fed minutes.

US CPI

On Wednesday, March inflation numbers will be eagerly observed to determine if price pressures have lessened sufficiently to curb the Federal Reserve's enthusiasm for future aggressive rate rises.

Core consumer price inflation, which includes food and fuel expenses, is expected to grow 0.4% month over month, for a yearly increase of 5.6%, up from 5.5% in February.

The inflation data comes on the heels of the latest US employment report, which indicated ongoing strength in the labour market, fuelling expectations that the Fed will raise rates again at their May 2-3 policy meeting as financial stability risks lessen.

Additionally, on Friday, the economic calendar includes March retail sales data, with experts forecasting another decrease as rising inflation erodes people' purchasing power. On Thursday, reports on initial unemployment claims and producer price inflation will be issued.

Fed Minutes

On Wednesday, the Fed will release the minutes of its March meeting, which will be analysed for hints about the Fed's willingness for more policy tightening as well as officials' opinions on the stability of the financial system.

In March, Fed policymakers jointly decided to raise interest rates for the ninth time in a row, signalling that controlling inflation remains their top concern.

Recent banking sector crisis has fuelled expectations that aggressive monetary tightening may not only send the economy into recession, but will also result in additional bank collapses.

Bank Earnings

When financials start off the first quarter results season, investors will get an update on the health of the US banking industry following last month's crisis caused by the failure of two mid-sized institutions.

JPMorgan and Citigroup will report on Friday, followed by Goldman Sachs, Morgan Stanley, and Bank of America the following week.

According to Reuters, the S&P 500 financials are predicted to produce 5.2% year-on-year profit growth in the first quarter, placing them among only four sectors whose earnings are likely to rise.

(Investing.com, Reuters.com)