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

Kevin Buckland

The marquee markets event for the week is almost upon us,

and needs little introduction: The outlook for U.S. interest

rates continues to be the elephant in the trading room for all

asset classes, responsible not only for recent peaks in Treasury

yields and the dollar, but also forming the backdrop for record

runs and subsequent declines in the likes of gold and bitcoin.

The Federal Reserve wraps up its two-day powwow today with

all ears trained on what Chair Jerome "Jay" Powell has to say in

his news conference, which takes on extra weight in the absence

of updated economic projections from the board this time around.

A cautious, hawkish tone seems likely given Powell has

professed diminished confidence over a near-term cooling in

inflation, following the economy's abrupt pivot from a perfect

soft-landing scenario to a very extended holding pattern, high

above the runway.

Futures markets now just barely see a single quarter-point

rate cut by year-end, from an many as five of those at the start

of the year.

The Fed meeting has kept markets relatively well-behaved

into the event, barring Wall Street's steep slide overnight

following more heated labour data, and the fireworks in

dollar-yen at the start of the week in what now looks clearly

like official Japanese intervention, despite finance ministry

officials playing coy.

Even in that environment, king dollar grinds

inexorably higher as two-year Treasury yields scale

nearly six-month peaks.

Holidays around most of Europe mean even less distraction

from the week's main event, although ECB policymaker Pablo

Hernandez de Cos has a chance to air his views at the London

School of Economics. Contrary to the Fed, money markets are more

than 70% priced for a first euro zone rate cut as soon as the

next meeting in June.

It's business as usual for London, and Britain gets home

price data and manufacturing PMIs.

The earnings calendar is light in the European day, but

picks up again in the U.S., with Mastercard, Qualcomm ( QCOM )

and Pfizer among the diverse list of

headliners.

Key developments that could influence markets on Wednesday:

-FOMC concludes two-day meeting

-UK Nationwide house prices, S&P manufacturing PMI (both

April)

-U.S. earnings including Mastercard, Qualcomm ( QCOM ) and Pfizer