Emerging Markets | Europe | UK | US
Key Events: Will Tariff Day Alleviate Policy Uncertainty?
- By Macro Hive
Key Events
G10
In the US, there is…
- Tariff Day – Wednesday. The administration unveils its tariff plans. Hopefully tariff and other policy uncertainty declines from then.
- NFP – Friday. Consensus expects lower NFP, 135k vs 151k in February, with unchanged unemployment at 4.1%. This implies a labour market that remains at full employment and therefore a Fed on hold. Consensus also expects unchanged wage growth at 30bp, despite the slower labour supply growth implied by lower NFP with stable unemployment.
- PMIS- Tuesday, Thursday. These will indicate price pressures and business confidence, though they are poor leading indicators of GDP and are more trading than economic events. For market impact please see our event monitor.
In the Eurozone and UK, the main events will be:
- EZ March Preliminary CPI – Tuesday. French and Spanish inflation was weaker than expected, improving the odds of an April ECB cut. A large undershoot could confirm a cut, with tariffs to be announced Wednesday, too.
- EZ Unemployment Rate – Tuesday. The unemployment rate is expected to remain at 6.2%. We think the labour market may be about to re-tighten.
- Final PMIs – Tuesday and Thursday. Preliminary details suggested pessimism is bottoming, for now. Positivity was shared across manufacturing and services, with deterioration in the former slowing and improvements continuing in the latter. Continuation would support ECB hawk’s higher estimates of neutral.
Elsewhere in G10:
- Q1 Tankan Survey – Tuesday. We are looking for continued support for our view that BoJ hawkishness will stall through H1.
- Switzerland CPI – Thursday. Core inflation is expected to remain at +0.4% YoY while headline is expected to align with SNB forecasts. The 25bp March cut may prove the last.
EM
- China Official PMI – Monday. We expect the manufacturing PMI to improve. High-frequency data show a rise in industrial capacity utilization and container throughput compared to February. However, the weak domestic commodity prices suggest weak price development.
- Poland inflation – Tuesday. Higher food prices are the main upside risk to inflation this month. And with base effects largely neutral, YoY inflation could yet move higher.
- Czechia CPI – Friday. FX strength and a still-subdued consumer should mean inflation drops back closer to target.
- South Korea CPI – Friday. Currency weakness and very subdued domestic demand create opposing inflationary dynamics.
Central Banks in Action
- Fed Powell – Friday. I expect Powell to repeat that the economy is resilient, the labour market is likely to remain close to full employment and that his base case scenario is for no second round effects from the tariffs.
- RBA – Tuesday. We expect the cash rate to remain at 4.1%. A new RBA monetary policy board will prove the only interesting thing.
- Poland rate meeting – Thursday. Inflation close to 5% and a looming presidential election will mean yet another month of rates on hold.
Markets to Watch
- USD will be dictated by tariffs next week. We remain short.
- AUD is unlikely to find traction from the RBA outturn. Over the medium term, we expect AUD/NZD to fall to 1.06.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format to any third party without the express written consent of Macro Hive. This includes providing or reproducing this information, in whole or in part, as a prompt.)