With the Good Friday holiday cutting short the trading week, the next few days are a little light on data but there is a smattering of inflation and GDP releases to watch for.

Before we look at the data, all eyes are on whether we see further escalation on tariffs. The big selloff last week was sparked by fears of a nascent trade war, chiefly between the US and China.

All eyes were on the Fed last week but it was Donald Trump and not Jay Powell who proved the more market-moving as markets really began to think the bite of tariffs might be worse than Trump’s bark.

Insouciance was lacking by Thursday as the markets produced one of the sharpest sell-offs in recent years. That was mainly an equity (risk) based move but of course we did see this filter out into the currency markets.

This week the White House is still seen driving all the action. The good news for markets is that ‘allies’ are being shielded; the bad news is that this is increasingly a targeted plan against China that threatens cooperation, global growth (China is in every supply chain) and the fine geopolitical balance in Asia.

The decision to fire national security adviser McMaster in favour of the arch-hawk John Bolton – an unrepentant cheerleader of the Iraq invasion – certainly suggests the administration will take a harder line on Iran, North Korea and, in all likelihood, China. Getting a deal on North Korea with China's help now looks less likely.

So it’s not just the raw economics of trade wars on GDP – we’re also seeing a re-emergence of geopolitical risks that threaten the synchronised global growth picture. Escalation of this emerging trade war would be bad for risk sentiment.



After the Fed’s dovish hike last week sent the dollar sliding against its major peers, the chief focus this week is on whether officials are reading the inflation signals correctly. Whilst the Fed raised its forecasts for interest rate hikes in 2019 and the long-term rate, chair Jay Powell’s relaxed attitude to inflation was taken as a sign that policymakers will not accelerate tightening beyond broadly what the market already anticipates.

“There is no sense in the data that we are on the cusp of an acceleration of inflation,” Mr Powell said. The PCE inflation data will show whether he’s right to be sanguine, or whether the FOMC has misjudged things. It may also show whether the market was right to read last week’s Fed as dovish, or whether there has been a clear hawkish shift that the dot plot fails to reveal.

A month ago, the Commerce Department reported consumer prices as measured PCE price index rose 0.4% in January, the biggest increase since September. In the 12 months through January, the PCE price index rose 1.7%.  The core PCE index, which excludes volatile components like food and energy, rose 0.3% in January - the largest gain since January 2017.

US core PCE inflation, personal spending and weekly unemployment claims figures will released at 13:30 (BST) on Thursday.

Japan inflation


Amid a flurry of data from Japan in the early hours of Friday morning are a couple of important core CPI inflation readings that will help show how close the Bank of Japan is to meeting its target.

There have been some murmurings that the BoJ could dial back its massive stimulus programme earlier than planned, moving on its yield curve control policy before the 2% inflation target is achieved.

Comments from new deputy governor Masayoshi Amamiya last week hinted at a possible shift in policy even if the 2% goal remains beyond reach. The comments were not dissimilar to those of governor Haruhiko Kuroda, who said earlier in March that the central bank would start discussing an exit from stimulus next year.

While all very tentative, the market is reading a slight shift in tone and there is a perception that the BoJ is testing the market’s response to an exit. The implication is that BoJ cannot go on forever and needs to reduce accommodation at some stage. Yen strength of late seems tied to this notion with USDJPY sliding every closer to the 100 handle as forex markets anticipate any actual policy shift.

GDP final readings


The third and final readings on GDP are usually the least market sensitive, but with markets focused on the trajectory of growth in the world’s largest economy, the US Q4 2017 final print on Wednesday will be watched for any revisions that imply strength or weakness leading into Q1 2018. In the Commerce Department’s second reading in February, growth in Q4 last year was revised lower to 2.5% from 2.6% initially forecast.

UK economic growth in the final quarter of 2017 was also revised lower in the second reading, sliding to 0.4% from 0.5% initially forecast. The third and final reading is due on Thursday alongside current account and lending figures.




Little from the US of note but there are a few final results due out on the FTSE. Among the biggest comes from Ferguson, the US-focused building materials group formerly known as Wolseley. The stock has been on a tear off the back of US economic growth and the promise of bigger infrastructure spending. But Amazon’s foray on to Ferguson turf has left investors worried and the stock has failed to move since November. Elsewhere, Moss Bros reports full year results after last week issuing a stark profits warning that saw the shares tumble.

Economic Calendar

(All times BST)

Sunday, 25 March

UK and Europe Daylight Savings Time shift (clocks go forward one hour)

22:45 – New Zealand trade balance

Monday, 26 March

09:30 – UK high street lending

Tuesday, 27 March

08:00 – Spanish flash CPI inflation

09:00 – Eurozone M3 money supply

15:00 – US CB consumer confidence, Richmond manufacturing index

Wednesday, 28 March

01:00 – New Zealand ANZ business confidence

07:45 – French consumer spending

08:00 – German GfK Consumer Climate

09:00 – Swiss economic expectations

13:30 – US Q4 final GDP

15:00 – US pending home sales

15:30 – US crude oil inventories

Thursday, 29 March

Tentative – UK Nationwide house price index

07:00 – German import prices

07:45 – French preliminary CPI

08:00 – Swiss KOF economic barometer

08:55 – German unemployment change

09:30 – UK current account, final Q4 GDP, net lending to individuals

10:00 – Italian preliminary CPI inflation

13:30 – Canada GDP

13:30 – US core PCE inflation, personal spending, weekly unemployment claims

Friday, 30 March

All day – Major markets closed for Good Friday holiday

00:01 – UK GfK consumer confidence

00:30 – Japan household spending, Tokyo core CPI, unemployment rate

00:50 – Japan preliminary industrial production

06:00 – Bank of Japan core CPI inflation, housing starts

14:45 – Chicago PMI

15:00 – US Revised UoM consumer sentiment

Saturday, 31 March

02:00 – China manufacturing and non-manufacturing PMIs

15:00 - New Zealand Daylight Savings Time shift

17:00 – Australia Daylight Savings Time shift


Corporate Calendar


Monday, 26 March

Pennon Group (PNN) – trading update

Taptica International Limited (TAP) – final results

Baillie Gifford Japan Trust plc (BGFD) – interim results

YouGov Plc (YOU) – interim results

Tuesday, 27 March

Alliance Pharma Plc (APH) – final results

Bank Of Cyprus Holdings Plc (BOCH) – final results

Barr (A.G.) (BAG) – final results

e-Therapeutics plc (ETX) – final results

Gulf Marine Services plc (GMS) – final results

Moss Bros Group plc (MOSB) – final results

S & U plc (SUS) – final results

T Clarke plc (CTO) – final results

United Utilities Group Plc (UU.) – trading update

Ferguson plc (FERG) – interim results

James Halstead plc (JHD) – interim results

Wednesday, 28 March

Hilton Food Group Plc (HFG) – final results

North Midland Construction plc (NMD) – final results

Time Out Group plc (TMO) – final results

DFS Furniture Plc (DFS) – interim results

Thursday, 29 March

BBGI Sicav SA (BBGI) – final results

BH Global Ltd (BHGG) – final results

Chesnara plc (CSN)  - final results

Eddie Stobart Logistics plc (ESL) – final results



Sources: Bloomberg/Companies

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