Key takeaways:

• Inflation, jobs, and the start of earnings season dominate this week events

US banks were in the spotlight for all the wrong reasons this time last month, but now investors will be afforded an opportunity to take a closer look at their financials.

Economic Calendar and News

Inflation data out of the US this week will play a central role in determining whether the US Federal Reserve takes its foot off the gas with interest rates. 

While the Reserve Bank of Australia crosses its fingers and opts for a pause, other central banks, including the Fed, have forged ahead with rate hikes, even in the face of last month banking crisis. 

Nonetheless, the world largest central bank is sure to take stock of activity across the consumer sector, including Wednesday Consumer Price Index (CPI) reading, and the monthly retail sales report due Friday, US-time.

Based on consensus figures, economists believe the CPI data will show headline inflation increased 0.2% month-over-month, and 5.2% over the last year. If that transpires, these figures will indicate consumer prices are growing at their slowest pace in more than 20 months.

But the headline data may also prove misleading, because core' inflation, excluding the impact of volatile components like food and energy, is tipped to rise 0.4% over the month and 5.6% on an annual basis. That would indicate core inflation running at a higher rate than headline inflation, and signal potential risks in pausing rate hikes too soon.

The week ahead also features an update on the Producer Price Index (PPI), manufacturing and industrial production, and the release of the minutes from the most recent meeting of the Federal Open Market Committee (FOMC).On home soil, the big-ticket item is the jobs report from March. Forecasts suggest the Australian economy added another 20-25,000 jobs last month, which may be enough for the unemployment rate to remain steady.We'll also have the RBA minutes ahead, with the nation central bank scheduled to distribute its notes on Tuesday. The communications will detail the decision by policymakers earlier this month to pause interest rates, with recent commentary by RBA Governor Philip Lowe indicating the Reserve Bank board is prepared to have a slightly slower return of inflation to target than other central banks.Business and consumer confidence readings are also on the agenda this week. 

Stocks on watch

It that time of the year again, with another earnings season set to kick off in the US this week. Heading into week one, expectations are firmly in check, with higher interest rates and a slowdown in consumer activity prompting Wall Street to forecast the fastest decline in corporate earnings since the pandemic. 

Just weeks after the regional banking blow-up caught the market by surprise, attention will shift to the nation largest financial institutions. JPMorgan (NYSE: JPM), Wells Fargo (NYSE: WFC), Blackrock (NYSE: BLK), and Citibank (NYSE: C) are among the names in the financial sector that will hand down earnings. 

Investors may look closely at whether the large banks benefitted from an inflow of deposits amid the ructions that engulfed the sector last month. Naturally, there are potential pitfalls that may prompt the banks to build up their loan loss reserves, which would cover things like higher levels of bad debt arising from soaring interest rates and a weaker economic outlook.

Data from the Federal Reserve last week showed US$65 billion in deposits exited the US bank system, mostly from larger banks. Before that, another US$120 billion flowed out of smaller banks in each of the preceding two weeks, suggesting some underlying concerns remain on the table.

There are also earnings from a number of other high-profile companies including Delta Air Lines (NYSE: DAL), UnitedHealth Group (NYSE: UNH), not to mention community favourite Bed Bath & Beyond (NASDAQ: BBBY).

Delta Air Lines is expected to unveil a massive leap in revenue following a boom period for air carriers around the world. The backdrop for international travel demand has only grown over the last year, and continues to recover, which is a natural tailwind for the company earnings and free cash flow.

Elsewhere, oil major Exxon Mobil (NYSE: XOM) is said to be in early talks with Pioneer Natural Resources (NYSE: PXS) regarding a potential takeover of the fracking company. Pioneer is among the largest independent oil producers in the United States, while Exxon has amassed something akin to a war chest following sky-high oil and gas prices throughout much of 2022.And finally, BHP (ASX: BHP) proposed takeover of OZ Minerals (ASX: OZL) is expected to resurface as a talking point ahead of a vote on the deal this Thursday. Observers have expressed confidence the deal will get the go-ahead by OZ Minerals shareholders.

Major institutions such as Norway Norges Bank, as well as North American pension funds such as the California Public Employees' Retirement System and the Florida State Board of Administration have expressed their support for a takeover. As part of the deal, BHP will pay OZL shareholders $28.25 per share in cash as the iron ore titan seeks to increase its exposure to copper and nickel.