Weekly Market Outlook (03-07 March)

Upcoming Events,

• monday: China Caxin Manufacturing PMI, Switzerland Manufacturing PMI, Eurozone Flash CPI, Canada Manufacturing PMI, US ISM Manufacturing PMI.
• Tuesday: Eurozone unemployment rate, Canada-Mexico-China tariff time, Trump Congress speech.
• Wednesday: China two, Australia Q4 GDP, China Caixin Services PMI, Switzerland CPI, Eurozone PPI, US ADP, Canada Service PMI, US ISM SERVICES PMI.
• Thursday: China two-session, Switzerland unemployment rate, eurozone retail sales, ECB policy declaration, US unemployed claims.
• Friday: Canada Employment Report, US Non-Form Payroll.

monday

Eurozone cpi y/y 2.3% vs. 2.5% expect, while core CPI Y/Y is viewed 2.6% vs 2.7% first. There is some risk in the markets, so a soft report will likely to reduce some of those apprehensions around inflation and ECB will get more confidence to make the policy easier. More than the expected data, however, possibly maintain markets on the edge. The market is expected to reduce a total of 87 BPS by the end of the year.

US ISM manufacturing is expected before PMI 50.8 vs 50.9. Recently, S&P Global US PMI showed another optic on the manufacturing front, with the index growing up to 8 months height. The agency said many manufacturers also stated that the increase in production and demand was associated with an increase in the potential cost running in front or the reduction associated with tariffs was supplied, although the future spirit had increased relatively in manufacturing by recent standards.

Wednesday

Switzerland CPI has no consensus at the time of writing, although pre -release extended the core measurement before 0.9% vs. 0.7%. We have not received any remarkable data points or comments from the Central Bank officials, but the market is certain from the 25 BPS deduction in March and at the end of the year another 25 BPS deduction is pricing about 60% of the 60% pricing.

The US ADP is expected to be 140K vs. 183K before. This report will not be seen in the light of recent development, so the market will not like negative surprises. On the other hand, strong data is likely to provide some support to the risk of risk (being equal).

US ISM services are expected before PMI 52.9 vs 52.8. The S&P Global Survey showed some notable weakness in the service sector with index craving at a 25 -month low. The agency stated that service providers usually added recession to activity and spoiled the growth of new orders for political uncertainty, especially in relation to the possible policy effects on federal expenses cut and economic growth and inflation approaches. About the coming year to optimism to the lowest since December 2022.

Thursday

ECB is expected to cut interest rates by 25 BPS, which will make the policy rate 2.50%. We will get Eurozone Flash CPI report a few days before the meeting to probably shape their future spirit. The price of high services between some central bank officials is increasing a concern about reducing rates very rapidly amid inflation (which has stuck about 4% since November 2023) and tight labor market.

The US’s Jobless claims remain one of the most important releases to follow every week as it is a timely indicator on the labor market situation.

The initial claims remain within the 200K-260K range made since 2022, while the continued claims continue to hover around the high, although we have seen something easier recently.

The early claims of this week are expected before 235k vs. 242k, while continuous claims are seen before 1883k vs. 1862k.

Friday

The Canadian Employment Report expects 17.5k jobs and unemployment rate to 6.7% vs 6.6% more than before in February vs 76.0K in January. Jobs data has been defeating expectations by a big margin over the last few months as the aggressive BOC has promoted the economy. The CAD, however, remains on the mercy of the tariff, which is a threat to the markets as to what happens on Tuesday as the deadline ends.

The US NFP is expected to remain unchanged up to 4.0%in 153k jobs and unemployment rates in February vs 143K in January. Average per hour income is expected from y/y 4.1% vs. 4.1% before 4.1%, while M/m figure is 0.3% vs. 0.5% earlier. Working average weekly hours 34.2 vs. 34.1 are seen before.

I personally think that the last university of the Michigan Consumer Sentment Report has triggered the risk-staging spirit recently by jumping at a high of 30 years in long-term inflation expectations. If it was not for the weak US flash PMI for the US flash PMIS released 15 minutes ago, then the stock -off cannot be the cause of celloff in the stock market.

Therefore, it impacted expectations that the Federal Reserve can react very slowly to the recession in the economy due to a barrier to high inflation expectations that will eventually lead to more economic pain.

Therefore, the best-case landscape will be benign employment data that will be coupled with less than the expected wage growth data. In contrast, weak employment data and high wage growth figures will trigger another sales in the stock market and renew the risk-to-new flow.