Macroeconomics: The Day Ahead for 16 April 2026

Hopes continue to build for an extended ceasefire in Iran as chatter about as renewed round of US/Iran negotiations continues, along with talks on a ceasefire in the Israel/Lebanon conflict, with US equities making new highs, per se underlining what can only be described as a voracious appetite for risk, perhaps understandable, but also a major vulnerability if the fragile negotiations were to break down. To be sure, both the US and Iran are pretty much desperate for an ‘off-ramp’ to the conflict, but equally one should remember that Israel PM Netanyahu faces a domestic political reckoning were hostilities to cease. The ‘regular’ macro schedule is very busy with China’s Q1 GDP, monthly activity and property indicators, UK monthly GDP and Australian labour data, SNB March minutes and stellar Q1 earnings indications from TSMC to digest. Detailed final Eurozone CPI, US weekly jobless claims, Philly Fed Manufacturing survey and Industrial Production, ECB March minutes and a further deluge of central bank speakers, as well as a broader variety of US Q1 earnings: Alcoa, Abbott Labs, Kinder Morgan, Netflix and PepsiCo amongst others.

* U.K.: While February GDP surged a much stronger than expected 0.5% m/m and q/q, reversing January’s weakness, and paced by a jump of 0.5% q/q in the Index of Services and a jump in Mining and Construction output, and likely offering a truer reflection of growth, the quality of UK official statistical reporting is likely to be the primary talking point. It certainly appears to be the case that seasonal adjustments have gone awry, reflected above all in the volatility of incoming monthly data, and likely a legacy of the Covid pandemic era’s impact on both activity and inflation. It also makes both fiscal and monetary policy making a much bigger challenge given the erratic picture on key drivers of the economy. Particularly concerning in the detail of the big contribution from Services (0.38 ppt) is that the breakdown by sector looks considerably weaker than the headline. Given that the Labour Force Survey data have long been discredited, analysts will inevitably be forced to pay more attention to high frequency and other anecdotal data in assessing the health of the UK economy.

* China: As noted in the weekly preview, today’s run of GDP and monthly activity data (and indeed Monday’s credit aggregates) reinforced long standing perspectives on the dynamics of China’s economy, namely that while industrial output and exports remains robust, domestic demand is no better than sluggish. The long-standing property sector slump remains the biggest millstone for the economy and poses a big question on how authorities would need to respond if export growth were to slow or quite possibly decline in the face of the longer-term consequences of the Middle East conflict, and resultant redrawing of supply and trade routes. Still it also underlines that China’s economy continues to show a lot of resilience in the face of the immense trade and geopolitical tensions, but the escalating imbalances in its economy pose a threat to the outlook, especially considering that a good deal of its export growth relies on demand from developing economies that are most at risk from food and energy price shocks.

* U.S.A.: Yesterday’s Fed Beige Book showed that the US economy continues to show a good deal of resilience, even if concerns about the economic outlook at a business level have risen due to geopolitical and domestic policy uncertainty. Today’s March Industrial Production is seen eking out a marginal 0.1% m/m, as is Manufacturing Output, though in both cases rising input price pressures are likely take a month or two to dampen output. After what was probably yet another bad steer on trends in the Manufacturing sector from the frequently erratic NY Fed survey, today’s Philly Fed report should offer a more reliable indication, and is expected to drop o 10.0, after an unexpectedly strong March 18.1, per se more a reactive correction to March than a war related setback. That said the Philly Fed region has a disproportionately large refining sector, which will continue to see strength, above all given the latest report showing that the US is on the brink of becoming a net energy exporter for the first time since World War II.