Macroeconomics: The Week Ahead: 16-20 March 2026

The new week brings central banks into the frame of
distractions from the conflict in the Middle East via way of Fed, ECB, BoJ,
BoE, RBA, BoC, SNB and Riskbank policy meetings, though only the RBA expected
to hike rates a further 25 bps to 4.10%, but all others seen holding rates
steady. Given the continued market turbulence and volatility, oil futures and
options expiries and Friday’s ‘quadruple witching’ for US equities will be in
focus, above all the impact on overall open interest, which looks likely to
fall given current risk and volatility premiums. There are a good number of
major statistics: US PPI and Industrial Production; China Retail Sales,
Industrial Production, FAI and Property Indicators; UK and Australia labour
reports; Canada CPI, Japan Private Machinery Order and Trade, and detailed
final Eurozone CPI. Outside of the Middle East conflict, the political calendar
has the weekend municipal elections in France and Germany to digest, the
meeting of Trump and Takaichi, and the week ending two day EU council meeting.
Energy prices (above all oil products, NatGas and fertilizers) will remain
front and centre, and while there are some US Livestock sector reports, the
busy run of conferences may be. The attacks on the military installations on
Iran’s oil hub Kharg Island as the conflict enters its third week, and the
threats from both sides to attack oil infrastructure marks a further unwelcome
escalation. Meanwhile the US calls for other nations (UK, France, China, Japan
amongst others) to end warships to defend shipping going through the Straits of
Hormuz is a tacit admission that it cannot do it on its own, and even then, it
would hardly eliminate the threat from small rapid attack seaborne vessels, as
well as dragging more and more countries into the conflict.

 ** Central banks meetings **

– Fed: the FOMC meeting will bring a fresh ‘dot plot’ which will almost certainly imply rates will be higher for longer, though the Summary of Economic Projections will offer some clues where the current FOMC sees the greatest risks in terms of inflation, employment and growth. The message from Powell (and indeed all the other central banks meeting this week and over the next month) is that there are clear risks on all fronts, it is too early to take any form of pre-emptive policy action, but the Fed stands ready to act as and when some visibility emerges. Powell and all other central bankers will need to choose their words extraordinarily carefully, to try and avoid sharp market reactions, and the risk of misinterpretation will be high. Sadly some of the Powell press conference will doubtless be taken up with questions about US District Chief Judge James Boasberg ruling the government had advanced no evidence to justify the subpoenas served on Powell and other members of the Fed in relation to the DoJ’s criminal investigation into the Fed’s ongoing $2.5 Bln renovation of its headquarters in Washington.

– ECB: The ECB will also publish a fresh set of staff forecasts, with Lagarde already flagging that these will be a case of scenario analyses, rather than the regular baseline forecasts, which given the fog of uncertainty is hardly surprising. On balance Lagarde will likely suggest that barring any significant second round effects, the bar to raising rates in the near term is high. Particular attention will likely be given to the scenario analyses for the EUR, given a sharp swing from pre-war concerns that the then strength of the Euro might force the ECB into a further rate cut, to the current concern that high energy prices will pressure the Euro a lot lower, and by extension force the ECB to hike. The usual ECB rhetoric about there being no target for the EUR’s exchange rate, but rather the pace of any appreciation or depreciation being their point of focus. Still the likely underlying message will be that risks on upward inflation pressures have risen, as have potential headwinds to growth and employment.

– BoJ: Governor Ueda probably face the least enviable task of all the major central banks, given the BoJ was already navigating a high wire act before the Middle East conflict, in so far as it remains ‘behind the curve’ on rates, the JPY was already under pressure, and PM Takaichi and her cabinet are very resistant to further rate hikes. While Finance Minister Katayama has touted FX intervention to halt JPY weakness, the messaging has hardly been forceful, in no small part recognizing that there is only a limited amount of ‘talking the talk’ one can do, before markets call her bluff on ‘walking the walk’. Intervention (be that jointly with the US, or unilateral) may indeed be rather fruitless for a huge energy importer if crude retests the recent $120 / bbl high. Given that current year wage settlements are set to be at or above last year’s levels, the case for a rate hike remains strong, the question is how strongly will Ueda signal that an April rate hike is on the cards, though likely continuing to obfuscate on an end point for the rate trajectory. The week’s run of data is expected to be quite noisy with the Tertiary (services) index seen rebounding 0.7% m/m after a much sharper than expected -0.5% in December (generally attributed to a sharp drop in Chinese tourism), Private Machinery Orders are seen sliding -10.4% m/m after surging 19.1% m/m in December, while Trade data will be heavily impacted by Lunar New Year timing effects, with Export growth forecast to slow to 1.9% y/y from January’s 16.8%, and Imports to jump 11.3% y/y after falling -2.6% y/y – though none of these are likely to prompt any changes in the BoJ’s economic outlook.

– BoE: Governor Bailey and his fellow MPC members also face a very fluid economic outlook, with the surge in energy prices likely putting paid to February forecasts that CPI would fall and remain below target this year, which in turn has seen markets price out the chance of any rate cuts this year (though market pricing for UK rates has long been both fluid and very fickle. Ahead of the meeting, the latest set of labour market indicators are expected to show headline Average Weekly Earnings dropping to 3.9% from 4.2% y/y, but core Private Sector Earnings edging up 0.1 ppt to 3.5%, mostly due to base effects, though private surveys have indicated an upturn in settlements. By contrast HMRC Payrolls are forecast to post another modest -9K drop (as ever, revisions need to be watched), and the Unemployment Rate to edge up to 5.3% (the level at which BoE forecasts had expected to peak). Markets are likely to focus on any shift in the vote (consensus for a repeat 5-4 for a hold, the remining four voting for a cut), with perhaps one or two of the rate cut votes in February moving to hold, and there will be particular interest in both its forward guidance (likely to retain an easing bias, but adopting a ‘wait and see’ stance for the time being).

– Australia RBA: A further 25 bps hike is expected, with the consensus also seeing a further 25 bps hike to 4.35% by August, though opinions on the latter are divided, and most see the RBA signalling a pause this week, but retaining a tightening bias. Inflation remains elevated (Jan headline CPI ticking up to 3.8% y/y, and core Trimmed Mean to 3.4% y/y, both above the 2.0-3.0% target range), growth robust (Q4 GDP 0.8%), and the Unemployment Rate at 4.1% (and seen holding there in this week’s February labour report) below the RBA forecast (though primarily due to a low participation rate). The RBA may well highlight that the jump in energy prices (above all in a country heavily dependent on fuel imports) will likely hit consumer spending quite quickly, and business hiring intentions, justifying a pause after this week’s move, and buying some time to see how the surge in energy prices plays out in Q2.

– Canada BoC: Ahead of Wednesday’s BoC decision, Monday’s CPI is forecast to see headline CPI fall to 1.9% y/y from 2.3% thanks largely to benign base effects, but still up a robust 0.7% m/m, while both Median and Trimmed Mean core CPI measures are seen easing 0.1 ppt to 2.4% and 2.3% respectively. Upward pressures from autos, clothing and furniture prices are likely to confirm both pass through effects from tariffs, as well as upward PPI pressures evident in surveys. The BoC is seen on hold at 2.25%, and likely to continue to emphasize that the growth outlook remains weak, and that the latest labour data point to increasing slack in the labour market, justifying its current policy stance. Of note will be whether it places greater emphasis on higher energy prices likely driving inflation higher or being more concerned about the impact on growth and employment.

– Switzerland SNB: Given that the SNB has previously put a relatively high bar to reverting to negative rates, and the fact that the CHF has appreciated around 2.0% in real terms in 2026, the SNB seems likely to hold rates at 0.0%, but talk up FX intervention, noting FX strength heightens deflationary risks. In its quarterly bulletin, its underlying assumption for Oil prices (last $64 in Dec) will be revised sharply higher if it sticks with its prior methodology of using the 20-day moving average, and implies an upward revision to its prior CPI forecast of 0.3% for 2026, though probably still no higher than 0.5%, given an offset from CHF strength. The SNB will however have to tread carefully on its FX intervention rhetoric given the trade tensions with the US, which took a good deal of negotiation to negotiate lower before reaching a deal in 2025. It will also be wary of how it deploys its intervention (i.e. limiting purchases of foreign assets), given increasingly substantial financial stability constraints, above all post Credit Suisse.

Statistics

– China likely gets bragging rights in terms of the run of this week’s major economy data, with its barrage of activity data on Minday. The as always aggregated Jan/Feb readings for Retail Sales are expected to get a boost from holiday related spending, though the bounce from December’s 0.9% to an expected 2.5% y/y for Retail Sales will still leave it running below 2025’s 3.7% y/y, per se reflecting still very cautious consumer spending. Industrial Production is expected to be little changed at 5.3% y/y (vs. Dec 5.2%), continuing to be supported by strong exports, though the slightly longer LNY holiday imparts some downside risks. The latter is likely to weigh heavily along with LNY timing effects on Fixed Assets Investment (FAI) that is forecast to slow even further to -5.1% y/y from December’s -3.9%, and deepen the downturn in Property Investments to -19.1% y/y vs. Dec -17.2%, with Residential Property Sales also likely remaining depressed (Dec -13.0%).

– U.S.A.: After a hefty boost from Trade Services in January (headline 0.5% m/m, ex-Food & Energy 0.8% m/m), February PPI is expected to moderate to 0.3% m/m across all measures. The focus will likely be on the upward pressure on Aluminium prices on Manufacturing Equipment prices, which will increase in coming months, as well as the components feeding into the PCE deflators, such as Portfolio Management Fees, Airfares (seen easing in Feb, but set to surge in March) and Medical Care Services. Industrial Production and Manufacturing forecast to slow sharply to just 0.1% m/m from January’s 0.7% m/m and 0.6% m/m respectively, though the risks appear to be for a better than expected outturn, given a solid ISM Production reading and a boost to Utilities from the extended period of cold weather. March NY and Philadelphia Fed Manufacturing surveys will offset the first insights into the impact of the Middle East War, which thanks to the jump in Mortgage Rates may also weigh on the NAHB Housing Market Index, as against a consensus estimate of a marginal rise to 37.

– Outside of the focus on energy prices, commodities markets will see a number of USDA livestock sector reports, as well as a good number of major conferences including the MySteel Lithium and Iron Ore events in China, JPM and BofA Industrials and Piper Sandler conferences in the US, India’s Bharat Electricity and the Future of Utilities Energy Transmission in the Netherlands. But the overarching theme will remain concerns about supply chain disruptions for petrochemicals, fertilizers, refined products, and huge impact of the war on shipping rates and insurance. While the western world may be focussed on the impact in Europe and North America, the key aspect will be how much disruption there will be in the engine of global growth, i.e. Asia and how much longer it will continue to be able to show the resilience to global trade tensions evident in 2025.

– There are 10 S&P 500 companies reporting this week, with worldwide corporate earnings highlights as compiled by Bloomberg News likely to include: Accenture, AIA Group, Alibaba Group, Alimentation Couche-Tard, China Petroleum & Chemical aka Sinopec, CK Hutchison, Cosco Shipping, East Money Information, Elbit Systems, Enel, FedEx, Fubon Financial, Hon Hai Precision Industry, Itausa, Jabil, Lululemon Athletica, Micron Technology, Ping An Bank, Power Corp of Canada, Prudential, Shandong Hongqiao Aluminum Industry, Talanx, Tencent, Verbund, Wanhua Chemical, Zijin Gold International, Zijin Mining.