The Week Ahead - 3 - 7 March 2025
These are the Key Macro Events for the upcoming week.
US – We expect nonfarm payrolls to increase by 100k, with the first evidence of the new federal hiring policies coming into view. Compared to earlier data, we expect a slowdown in government, education and health sectors. We expect the unemployment rate to go back to 4.1%. Earlier in the week, the ISM indices are likely to decrease somewhat, on the back of deteriorating economic sentiment and confidence linked to the new administration's policy.
The Netherlands – The February flash CPI estimate is expected to come in at 3.2% y/y, which is a marginal decline from the 3.3% in January. Underlying the February figure, we expect energy prices to have declined on a y/y basis given favourable base effects as the energy index was significantly higher in February 2024. Food inflation expected to stay around 7% y/y, in which a large role can be attributed to changes in product-specific tax rates. Without these changes, food inflation would have been roughly 3.5pp lower in January. Generally, inflation is expected to remain a services story, due to continued wage growth and a tight labour market.
Eurozone – The ECB is widely expected to lower rates by another 25bp. Staff will also release updated forecasts at this meeting, though we will not see any tariff or defence spending related impact in these until policy is enacted. See our ECB preview here for more. Flash HICP inflation for February is expected to move lower, both core and headline. The headline move lower will be driven by base effects in energy (on a monthly basis energy is still expected to rise; the recent fall in wholesale prices will be visible in March). More importantly, services inflation is expected to fall to a new post-energy crisis low, albeit still on the elevated side.
China – Next week, the annual round of key policy meetings (Two Sessions) will start. In the annual National People’s Congress (Wednesday 5 March), the policy direction and key economic targets will be presented. We expect the confirmation of further stimulus to stabilise the property sector and domestic demand. This will partly help shielding the drags from a further stepping up of US import tariffs, with president Trump threatening recently with an additional 10% per 4 March on ‘fentanyl issues’ – following a similar 10% rise implemented in February. Meanwhile, February PMIs are expected to show some improvement on balance, the official manufacturing PMI in particular. On Friday, export growth in the first two months of this year is expected to come in at 5.0-5.5%.