In a week dominated by central bank decisions and key economic data releases, the Reserve Bank of Australia (RBA) and the Bank of England (BoE) took center stage. Both central banks opted to maintain their interest rates, reflecting caution amid lingering market uncertainties.

The RBA decided to keep its Cash Rate unchanged at 4.35%, although market watchers warned that a surprise rate hike could not be completely ruled out. This came after the Q1 Consumer Price Index (CPI) figures exceeded expectations, dampening expectations for rate cuts in 2024. With the first rate cut now expected in Q2 2025, the central bank emphasized its focus on achieving inflation targets in a reasonable timeframe.

Meanwhile, the BoE also chose to hold interest rates steady at 5.25%. The latest inflation report indicated a moderation in headline and core figures, but the central bank expressed concern over the persistently high services inflation measure, which stood at 6%. The labor market data presented mixed signals, with an increase in the unemployment rate and job losses alongside high wage growth figures. The market anticipates a rate cut in September, and it is unlikely for major changes to be made in the upcoming period.

Turning to other key economic data, the Japanese Average Cash Earnings Year-on-Year (YoY) is expected to come in at 1.5% compared to the previous reading of 1.8%. The Bank of Japan (BoJ) reiterated its commitment to achieving its inflation target, and the timing of any further rate hike remains uncertain, with July and October being potential options.

North of the border, Canada's labor market report is expected to show 17.5K jobs added in April, following a decrease of 2.2K in March. However, concerns loom as the unemployment rate is expected to rise to 6.2% from the previous 6.1%. The previous report disappointed with job losses and a significant spike in the unemployment rate, while wage growth raised the Bank of Canada's (BoC) attention. The market anticipates the BoC's first rate cut to be in June, with higher probability for a move in July.

Overall, as central banks maintain a cautious stance amid mixed economic data, market participants remain on edge. With the labor market's performance and inflation figures being closely monitored, the path for the next monetary policy actions continues to be uncertain.