Weekly Market Outlook (17-21 March)

Upcoming Events,

• monday: China industrial production and retail sales, US retail sales, US NAHB Housing Market Index.
• Tuesday: German ZEW, Canada CPI, American housing begins and builds permits, US import price, American industrial production and capacity use.
• Wednesday: BOJ Policy Declaration, FOMC Policy Declaration.
• Thursday: Australia Employment Report, PBOC LPR, UK Employment Report, BOE policy announcement, US unemployed claims.
• Friday: Japan CPI, Canada retail sales.

monday

American retail sales are expected before M/M 0.6% vs. -0.9%, while the pre -autos figure is 0.4% vs. 0.4% earlier. The focus will be on the control group figure which is expected before 0.2% vs. 0.8%.

Consumer expenses have been stable in the previous months that you will expect positive real wage growth and flexible labor market. Recently, however, we have been watching some ease in consumer spirit due to ongoing trade wars and tariff uncertainty, which was weighed at expenses.

Tuesday

Canadian CPI Y/Y is expected before 2.2% vs. 1.9%, while M/M reading is seen before 0.6% vs. 0.1%. Stirine-inguten CPI Y/Y 2.8% vs. 2.7% expect, while mean CPI Y/Y is seen 2.8% vs. 2.7% first.

Inflation has been inside the target band for almost a year, although we have recently seen a slight crowd as in the last one year, aggressive ease from the BOC began positively affecting economic activity.

The economic data outside Canada is beginning before Trump’s trade war with Canada, but recently began to weaken due to the weight of uncertainty on consumer and professional spirit.

As a reminder, BOC cut the uncertainty of trade and a 25 basis points in interest rates in 25 basis points as the expectation of last week amid concerns over the weak growth due to American tariffs. The central bank emphasized a cautious approach to future decisions, balanced the pressure on inflation against the pressure downwards on weak demand.

Governor Tiff McCalem acknowledged economic uncertainty, and warned that a long -term trade war could slow down GDP growth, weaken the job market, and push inflation more, creating a difficult policy environment.

The market did not raise much expectations for much ease at the end of the year, but carried forward the cut in the rate expected from the central bank to offset the negative spirit between the trade war. The upcoming meeting has a 52% chance of another 25 BPS deduction, with a total of 45 BPS ease by the end of the year.

Wednesday

BOJ is expected to keep the interest rates stable at 0.50%. Recently the data began to come to the soft side and Governor Uda did not look like any person who is in a hurry to raise rates amidst some uncertainty.

Japanese firms agreed to less than the increase of wages. This did not change the market pricing of 31 BP at the end of the year as traders wait for more data on the inflation front to increase expectations for another rate hike.

As a reminder, Tokyo CPI recently recalled expectations with a remarkable dip to the 2% handle.

The fed is expected to keep the interest rates stable at 4.50–4.75%. Recently, Fedespex is bending towards accepting some short -term uncertainty among Trump’s policies, but still looking at concrete growth.

Fed Chair Powells, especially on the current waiting and viewing trend seemed to be very adamant as they said that the cost of being vigilant is very low and the central bank does not need to do anything right now.

The US CPI and PPI data has increased the estimates for the core PCE despite coming to soft despite coming to soft last week, which is Fed’s favorite inflation remedy. This will now add their causes of staying on the edge for now.

The focus will be on Sep and especially on the Dot Plot as the market will be curious to see if the central bank increases estimates by two to three rate cuts in 2025. The market is pricing to make 70 BPS easier at the end of the year.

Thursday

The Australian Employment Report is expected to show 30k jobs in February vs. 44K in January and is unchanged at 4.1%. As a reminder, the RBA cut interest rates by 25 BPS, as the cash rate was recently brought up to 4.10%, but it was more with Hawkish than the expected guidance.

After the rate decision, we got a strong Australian employment data and the monthly trimmed CPI is 2.8% left near the upper limit of the target range. This report is unlikely to change anything for RBA unless we see the material weakening the data.

Britain’s unemployment rate is expected to remain unchanged at 4.4%. Average income is expected to be 5.9% vs. 6.0% earlier, while pre-bones income is seen before 5.9% versus 5.9%. Analysts take care against employment data reliability and therefore unlikely to affect interest rate expectations.

As a reminder, the previous report defeated expectations across the board, which continues to keep BOE in an uncomfortable position given high increments and viscous inflation. There was not much change in market pricing, as we still have 54 bp expected by the end of the year.

BOE is expected to keep the bank rate unchanged at 4.50% with 7-2 votes partitions. The central bank remains in an uncomfortable position between high wage growth and sticky inflation. The previous UK CPI defeated expectations in the board with a measure of inflation of services, which is more concerned about BOE, jumping back to 5.0% handle before 4.4%. Therefore, it is unlikely that they give too much indication to keep the rates stable until they get more confidence on the inflation front.

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 ongoing claims continue to hover around the cycle high.

The early claims of this week are expected before 225k vs. 220k, while there is no consensus at the time of writing for the ongoing claims, although the pre -release saw a decrease of 1870K vs. 1897K.

Friday

The Japanese core CPI Y/Y 2.9% vs. 3.2% is expected. Tokyo CPI is seen as a major indicator for national CPI, so it is usually more important to the market than the national figure. In the previous report, the Tokyo Core CPI was not remembered expectations and a dipped back near the 2.0% handle.