The Week Ahead - 24 - 28 March 2025
These are the Key Macro Events for the upcoming week.
US – Friday we get the consumption report, including PCE inflation. Our nowcast for the m/m core PCE increase in February stands at 0.35%, while headline is expected to come in at a less ambiguous 0.3% m/m. This would raise the core y/y rate to 2.8% from 2.6% in January, supporting the Fed holding rates. We think consumer spending will largely rebound from last month at 0.6%, while personal income growth slows down relative to last month at 0.5% m/m.
Friday we also get the final release of the UMichigan survey data, including consumer sentiment and inflation expectations. The 5-year inflation expectation shot up to 3.9% in the preliminary release, raising concerns of de-anchoring, which would make the Fed's job substantially harder.
At the start of the week, we get March S&P PMIs. We expect the manufacturing PMI to revert slightly on the Trump boost it has had over the past months and services to show a further minor deterioration as well.
Eurozone – We expect the flash PMIs for March to show a modest improvement, with part of the surprise weakness in France that we saw in February expected to unwind, while Germany is also likely to see a sentiment-driven pickup following the elections and expectations for fiscal easing.
China – On Tuesday, we expect the PBoC to keep the 1-year medium-term lending facility rate on hold (at 2.00%) for now, in line with consensus. Going forward, we expect more policy rate and RRR cuts, but – also reflecting some improvement in recent economic data – the PBoC is probably not in a hurry and may wait until more is known about further US tariff plans, with more news on the tariff front expected in early April.