The latest US inflation report showed that prices picked up faster than expected in March. That only added to the evidence that inflation is starting to resist the weight of the Federal Reserve’s interest rate campaign, which has left rates at their highest point in two decades. That’s partly because the strong labour market is still doling out decent wages, powering consumer spending. After the report landed, traders pushed the first expected rate cut out to September. They now anticipate only two reductions in 2024 – down from an earlier forecast of six at the start of the year.

The European Central Bank (ECB) held interest rates steady for a fifth straight meeting, leaving the deposit rate at a record high of 4%, as predicted by the vast majority of economists. But the central bank said that it would consider lowering rates if it saw signs that previous rate hikes were still working on underlying price pressures and consistently sending inflation toward its 2% target. That’s the ECB’s clearest signal yet of a potential cut – and it’s just what the region’s economy ordered: Europe has barely registered any growth for more than a year.

A meeting was held in Brussels on Friday between European Commission Executive Vice-President Maroš Šefčovič, Spanish Foreign Minister José Manuel Albares and UK Foreign Secretary David Cameron, together with the Chief Minister of Gibraltar Fabian Picardo.  This was the first meeting in this format and a joint statement signalled that significant progress has been made on all key issues, including the airport which was seen to be one of the biggest remaining sticking factors. Negotiations will continue over the coming weeks to conclude the EU-UK Agreement which will no doubt have big implications for the territory’s future.

On Saturday night, Iran launched 300 missiles and drones at Israel. This is the first time Tehran has directly hit Israel from its territory, but about 99% of the missiles were shot down. Iran said the operation - which was in retaliation for an Israeli attack in Syria - has "ended". Biden warned Netanyahu that the United States will not participate in an offensive Israeli counterattack. The financial markets seem to expect no escalation from here – the oil price is stable so far and equity markets have indicated only small changes.

China has the opposite problem to the US and Europe, with inflation still virtually non-existent due to persistently weak consumer demand. Data out last week showed consumer prices rose by a less-than-expected 0.1% in March from a year ago. That’s a big drop from February’s 0.7% pace, when inflation had climbed above zero for the first time in six months during the Lunar New Year holiday. What’s more, producer prices – which reflect what factories charge wholesalers for products – fell for an 18th straight month, dropping by a bigger-than-expected 2.8% in March.

Higher interest rates usually mean a stronger currency. Yet, since the Bank of Japan made its first rate hike in nearly two decades last month, the yen has fallen against the US dollar to land near a 34-year low. Traders expect that trend to continue, piling on the most bets for the yen to fall in 17 years – despite repeated warnings from Japanese officials that they could intervene to halt the currency’s slide. See, even though Japan scrapped its negative interest rates, those rates still look squat compared to the US. They’ll probably stay that way for a while too, reducing the yen’s appeal among international savers and investors.