April 17 (Reuters) - Financial markets are in a buoyant

mood as U.S. President Donald Trump signals confidence that the

war in Iran will end soon, with talks probably on the cards

again this weekend.

The optimism may be tested by a batch of data likely to show

stuttering business activity and growing price pressures,

alongside a potentially bruising Congressional grilling for the

Federal Reserve's prospective new chair.

Here's all you need to know about in the week ahead in

financial markets by Lewis Krauskopf in New York, Gregor Stuart

Hunter in Singapore and Amanda Cooper, Alun John and Marc Jones

in London.

FED CHAIR, HOT SEAT?

Investors will learn more about Trump's pick to lead the Federal

Reserve when the former Fed governor Kevin Warsh appears before

Congress for his confirmation hearing on April 21.

Warsh steps into a tricky backdrop to achieve Trump's desire

for lower rates, with the Iran war's energy-price surge driving

concerns about higher inflation. Fed funds futures have swung

from pricing in two quarter-point cuts by December to virtually

none since the war started in late February.

Trump has openly vented his frustration at current Chair

Jerome Powell for not lowering rates more. This week, he

escalated his pressure campaign, threatening to fire Powell from

his separate Fed board seat if he doesn't leave when his term as

Chair ends on May 15.

Elsewhere, Tesla headlines a packed for U.S.

corporate earnings, while March retail sales data could shed

light on whether higher prices are hurting consumer spending.

BARREL HALF-FULL, OR HALF-EMPTY?

Iran remains the dominant market risk as the U.S. and Pakistan

talk up the prospects for a deal to end the conflict and open

the crucial Strait of Hormuz.

Stocks, especially in the U.S., are betting on a happy

outcome. The S&P 500 has bounced back to record highs,

and, despite worries about Japan's heavy reliance on energy

imports, the Nikkei is also at a record.

Traders are wagering that peace will allow a rerun of the

pre-war playbook where strong earnings supported stocks.

Oil markets are less convinced. Benchmark Brent crude may be

below $100 a barrel, but not by much, and it's still 33% above

late February levels. Even more striking, prices of physical

crude for delivery are at records.

Should talks fail to open the Strait, energy prices will

remain high, forcing central banks to keep borrowing costs

elevated and threatening corporate earnings.

A GLOOMY SPRING

The coming week brings a first look at how companies around

the world were coping as the Iran war passed the one-month mark

in April. Surveys for March showed a steep rise in input costs

and a slowdown in overall business activity, as firms everywhere

grappled with volatile energy markets, disrupted supply chains

and a dizzying news cycle.

Even though oil prices have eased, the threat of a global

inflation shock has diminished, but not disappeared.

First-quarter earnings, especially in imported

energy-dependent Europe, are showing airlines, retailers and

manufacturers grappling with deep uncertainty that could weigh

on profits.

The United States, a net energy exporter, is relatively

insulated but not immune from the effects of higher fuel prices.

Investors will look closely at the prices and employment

components of the upcoming purchasing managers' indices (PMIs)

for signs of stress.

Inflation figures from Japan, Britain, New Zealand and

Canada are also unlikely to paint a pretty picture.

ASIA FEELS OIL PINCH

Central banks in emerging Asia will feel the pinch too. China

sets its loan prime rate on April 20, though analysts see the

central bank keeping its benchmark unchanged through the end of

the year as the economy regains momentum. Even if growth is

expected to cool as the effects of the Middle East crisis hit

corporate profits and overseas demand, Asia's largest economy is

still better off than many.

Bank Indonesia, which meets on April 22, must defend a rupiah

that has recently fallen to record lows. The central bank

governor recently said it needs a recalibration of policy to

support financial market stability. Meanwhile the Philippines'

central bank, which meets on April 23, has warned of 'spillover

effects' after inflation accelerated in March and breached

policymakers' target range.

THE BIG 4-0

Turkey's central bank holds one of its most consequential policy

meetings on Wednesday, providing a litmus test of its commitment

to orthodox monetary policy.

Given its huge dependence on imported energy, the country has

been among the hardest hit by the economic blowback of the Iran

war. It burned though nearly $50 billion of its reserves to keep

the lira stable last month and been one of the few nations to

see its credit rating outlook cut.

The prospect of a durable ceasefire will certainly be part

of the discussion. But with inflation still likely to be nearly

30% by the end of the year now according to economists, the

likes of JPMorgan and Bank of America expect rates to be hiked

300 basis points back to a bruising 40%.

(Graphics by Mayank Munjal, compiled by Samuel Indyk

Editing by Shri Navaratnam)