Bleary-eyed traders returning to work after the Easter weekend have a short, yet action-packed week ahead.

They must contend first of all with the inexorable rise in inflation-adjusted borrowing costs -- yields on 10-year U.S. inflation-linked bonds are within touching distance of turning positive for the first time in two years.

The milestone is important. What's helped equity investors stay calm even in the face of steadily rising Treasury yields is the fact that after stripping out the effects of inflation, bond yields were deep in negative territory.

But as some bond investors look forward to interest rate normality, it will be a worrying time for stock markets, especially in pockets such as Big Tech where high valuations are partially premised on rates remaining lower.

And Federal Reserve policymakers are upping the hawkish drumbeat, with St Louis Fed chief James Bullard (a known hawk) saying he did not rule out a 75 bps rate hike.

Markets have reacted by pushing the U.S. dollar above the 128 yen level for the first time in two decades. With futures now pricing more than 200 bps of Fed rate hikes by end-2022, the greenback index has surged to a new two-year highs.

Meanwhile the IMF's Spring meetings kick off later in the day. Why do we care? Two reasons. The Fund's forecasts will offer a sense of how much the war in Ukraine and COVID lockdowns across China are knocking the world economic outlook.

And the Ukraine newsflow is hardly comforting. Negotiations have turned sour, U.S.President Biden labeled Russia's invasion a 'genocide' and Moscow has refocused its ground offensive in Ukraine's two eastern provinces.

Finally in Europe, France is in the spotlight before this weekend's second round Presidential election where latest polls suggest incumbent Emmanuel Macron has increased his lead slightly last week over the far-right's Marine Le Pen.

Key developments that should provide more direction to markets on Tuesday:

Earnings: Accor, L'Oreal, Johnson& Johnson, Xerox, Halliburton, Lockheed Martin, Netflix, IBM

Central bank speaker corner: SNB's Thomas Jordan, Fed's Charles Evans

IMF releases World Economic Outlook

Yen moves https://fingfx.thomsonreuters.com/gfx/mkt/mopanomogva/yen%20moves.JPG

(Reporting by Saikat Chatterjee and Dhara Ranasinghe; Editing by Sujata Rao)