A weaker economic outlook would also influence wage growth trends that could further impact private consumption.

Additionally, weaker growth forecasts would likely leave the USD/JPY at current levels as expectations of another BoJ rate hike fade.

US Economic Calendar: Consumer Confidence and Fed Chatter

On Friday, US consumer confidence figures for April will garner investor attention. Economists expect the Michigan Consumer Sentiment Index to decline from 79.4 to 79.0. Weaker-than-expected numbers could influence investor sentiment toward the Fed rate path.

Beyond the headline figure, investors must consider the sub-components, including inflation expectations. Economists expect the Inflation Expectations Index to decline from 2.9% to 2.8%.

A deterioration in consumer confidence could impact consumer spending. Downward trends in consumer spending would dampen demand-driven inflation. A softer inflation outlook could enable the Fed to cut interest rates. Moreover, downward trends in consumer spending would test bets on the US avoiding an economic recession. Private consumption contributes over 65% to the US economy.

With inflation and consumer confidence in the spotlight, investors must monitor FOMC member speeches. Reactions to the recent inflation numbers and forward guidance on monetary policy could move the dial. FOMC members Raphael Bostic and Mary Daly are on the calendar to speak.