A look at the day ahead in European and global markets from

Ankur Banerjee

In a week packed with central bank meetings, the Bank of

Japan'shawkish hold has set the stage for the Fed, the Bank of

England and the ECB to confront inflationary pressure as the war

in the Middle East keeps oil prices well above $100 a barrel.

As widely expected, the BOJ left unchanged its short-term

policy rate at 0.75% but three of the nine-member board proposed

hiking borrowing costs, signalling policymakers' concerns over

escalating price pressures from the Iran war.

That helped lift the yen just a bit to 159.02 per U.S.

dollar but the frail currency remains perilously close to 160, a

level that has previously led Tokyo to intervene in the currency

market. The yen has been rooted around 159 since mid-March.

The move from the BOJ may give some near-term support but

ultimately the yen is unlikely to firm too much, analysts say.

In short, markets can expect a continuation of the "carry

trade", using the yen as a cheap funding currency.

In geopolitics, the U.S. was reviewing Tehran's latest

proposal to resolve the war in the Middle East but a U.S.

official said President Donald Trump was unhappy with the

proposal because it did not address Iran's nuclear programme.

The uncertainty around the two-month-long conflict will

surely keep oil prices supported, with Brent crude futures

at $109 per barrel, well above the pre-war levels.

Investors' attention this week is on earnings from tech

giants and central bank meetings this week.

The Federal Reserve, Bank of England and the European

Central Bank are all due to announce policy decisions this week.

All three are expected to hold rates unchanged but attention

will be on what policymakers say about inflation and growth.

Key developments that could influence markets on Tuesday:

French unemployment data for March

Earnings: Novartis, Barclays ( BCS ), BP

and Airbus