1051 ET - European and U.S. corporate default rates edged high in March due to the Middle East conflict, Societe Generale's Juan Valencia says in a note. The European default rate settled at around 3.8% in March, reversing the downward trend seen at the start of 2026, Valencia says. The U.S. default rate climbed to 5%, undoing the decline in early 2026, he says. However the rise in default rates is unlikely to have a significant effect on European and U.S. credit markets, Valencia says. "So far, the disappointing levels of defaults are having a very limited impact on the overall high-yield markets." (miriam.mukuru@wsj.com)

1021 ET - The Bank of Canada will likely be pleased to see softer core inflation in March, helping policymakers in keeping the overnight interest rate at a currently stimulative 2.25% for the rest of 2026, says Oxford Economics' Michael Davenport. Higher energy prices pushed Canada's headline CPI 0.6 percentage point to 2.4% last month. And energy prices continued to rise in April. However, Davenport says that with the Canadian economy operating with excess supply, significant pass-through of higher oil prices to core underlying inflation is unlikely. (robb.stewart@wsj.com; @RobbMStewart)

1018 ET - Despite the sharp rise in gasoline prices in March, underlying inflation in Canada continued to look relatively tame, Desjardins' Royce Mendes says. The economics says the global increase in energy prices appears to have had only a limited impact on underlying inflation metrics in Canada. And even if the conflict in the Middle East continues, it looks set to represent a relative price shock that will have only minor spillovers to core inflation. As a result, Mendes says the Bank of Canada should be able to remain on the sidelines for the rest of this year in an effort to spur a revival of economic activity. The market is now pricing in less than one quarter percentage point increase this year. (robb.stewart@wsj.com; @RobbMStewart)

1017 ET - National Economic Council Director Kevin Hassett says the confirmation hearing of Kevin Warsh will allow people to see what a strong candidate he is in a CNBC interview. Hassett's comments come amid the DOJ investigation into current chair Powell on testimony he provided last summer about the Fed's building renovation project. Sen. Thom Tillis (R., N.C.) has vowed to withhold support for any nominee until the probe is resolved. When Warsh is Fed chair, Hassett said "everybody who wants to find out about all the cost overruns and everything else that have been going on over the last couple of years will, of course, be able to do so, because we've got a Fed chair there who people trust." (jessica.coacci@wsj.com)

1011 ET - The pass-through of higher commodity prices into underlying inflation in Canada will likely be modest, assuming the Middle East conflict winds down soon, KPMG Canada's Ali Jaffery says. The economist expects businesses will squeeze margins to preserve market share, and that will help temper medium-term inflation expectations to some degree, which is what the Bank of Canada will be focused on. "They will remain in a wait-and-see mode until the path of the conflict, and its initial impact on the global economy, are clear," Jaffery says. KPMG expects the BoC to remain on hold this month, and likely for 2026. (robb.stewart@wsj.com; @RobbMStewart)

0940 ET - Canada's inflation report for March could have been much worse, says Douglas Porter, chief economist at BMO Capital Markets. Higher energy prices drove inflation to 2.4% from the prior month's 1.8% reading, although missing expectations for a 2.6% surge. Components related to energy, led by gasoline, pushed inflation higher, while items like telephone services, auto insurance, furniture and some shelter costs posted declines. This indicates "the underlying story for the economy is softness," Porter says. Underlying inflation, therefore, looks contained, he adds. "Were it not for the conflict in Iran," Porter says, "the discussion would currently be revolving around the strong possibility of Bank of Canada rate cuts, not hikes." (paul.vieira@wsj.com; @paulvieira)

0930 ET - National Economic Council Director Kevin Hassett says he has not spoken directly with Treasury Secretary Bessent about WSJ reports that the United Arab Emirates has opened talks with the U.S. about obtaining a financial backstop. He calls the UAE an "incredibly valuable ally" and says he is sure the Treasury Secretary would "make every effort" to help if necessary. However he added that support is likely unnecessary, pointing to Trump's comments that peace talks are progressing. (jessica.coacci@wsj.com)

0920 ET - Inflation in Canada accelerated sharply to 2.4% in March from the prior month's 1.8% reading. That said, the jump was slightly below consensus expectations for a 2.6% rise. Economist Andrew Grantham at CIBC Capital Markets says the March data suggest limited signs of higher energy costs lifting other goods and services — noting that four closely watched gauges of core prices rose 0.1% on a month-over-month basis. Grantham says inflation likely jumps to 3% in April before easing in May as a result of the federal government implementing a temporary cut in fuel taxes. He adds spare capacity in the economy should prevent core CPI from reaccelerating too much, and keep the Bank of Canada on hold with rates through 2026. (paul.vieira@wsj.com; @paulvieira)

0905 ET - Fed chair nominee Kevin Warsh has argued that a coming productivity boom may give the Federal Reserve scope to bring interest rates lower, if greater productivity allows for low-inflation economic growth. But though economist Ed Yardeni also anticipates a technological boost to the economy this decade, he disagrees that outcome would justify lower rates. "While we share Warsh's optimism about productivity, we reach a fundamentally different conclusion about what it means for monetary policy," Yardeni writes to clients. Yardeni believes that faster growth will increase the natural rate of interest, or R*, the baseline rate the Fed targets to neither stimulate nor restrain the economy. "If the Fed lowers the federal funds rate below R*, the risk is that it will fuel financial speculation and instability," he writes. (matt.grossman@wsj.com; @mattrossman)

0858 ET - Inflation did indeed accelerate in March, as Bank of Canada Gov. Tiff Macklem predicted last week, due to a record one-month surge in gasoline prices due to the war in Iran. The year-over-year rise of 2.4%, however, fell short of market expectations. Providing further relief to Macklem et al at BOC was the reading on CPI excluding gasoline. That gauge came in at 2.2%, or very close to the BOC's 2% target and a deceleration from February's 2.4% result. The March CPI report likely keeps BOC pinned to sidelines and allows policymakers to maintain their neutral stance, pending what happens to longer-term CPI expectations. (paul.vieira@wsj.com; @paulvieira)

0857 ET - The prospect of a U.S.-Iran peace deal dwindles and Treasurys sell off, sending yields higher. Iranian officials threaten not to show up to an expected new round of talks. Oil rises and the WSJ Dollar Index is up 0.1%. Warsh's nomination hearing takes place tomorrow and investors will tune in for hints on what the new Fed leadership may look like. The 10-year yield rises to 4.264% from Friday's 4.244%. The two-year increases to 3.737% from 3.699%. (paulo.trevisani@wsj.com; @ptrevisani)

source: https://www.tradingview.com/news/DJN_DN20260420005197:0/