Macroeconomics: The Day Ahead for 24 March 2026

Yesterday’s market price action was instructive in so far as it underlined markets continue to believe that an end to hostilities will see a broad sense of ‘normality’ return to the global economy, i.e. they remain underpriced for either a longer-term conflict, or a likely protracted period of disruption to supply chains, and as a consequence inflationary pressures and growth headwinds in the event of a cessation of hostilities, and substantial shifts in global trade flows. At the current juncture, an end to hostilities would leave the current Iranian regime in place, and the long-term underlying tensions and issues at best temporarily put to one side. It would primarily allow all parties to rebuild their offensive and defensive capabilities, in other words amounting to nothing more than a ‘frozen conflict’, and the region in a constant state of alert to a renewed outbreak of hostilities, that would need to be reflected in markets’ risk premia. Per se, the adage ‘hope for the best, prepare for the worst’ remains more than valid, with the ambiguity of some of the communications from all sides only underlining this.

Today’s schedule is dominated by PMIs and a barrage of major central bank speakers, the latter only able to stress high levels of uncertainty and risks to the local and global economic outlook. As for the run of PMIs out of Asia and Europe overnight have been notable for only modest dips or marginal improvements in the Manufacturing sector, and often sharper than expected drops in Services. That probably reflects the fact that manufacturing companies feel some comfort from the lengthening of order backlogs before the conflict started, adequate stocks of raw materials in the short-term, and hedges to protect against short-term price spikes, while Services are more immediately vulnerable to consumers reining in spending as energy and food prices rise, as well as a drop in travel and other leisure activities. Attention will also need to be paid to China’s annual Boao Forum (aka China Davos), with officials likely to press hard to give the impression that China is a haven of stability in an uncertain and heavily disrupted world.

Disclaimer:
This commentary is provided for information purposes only and reflects market conditions and analyst views at the time of writing. It does not constitute investment advice, investment research, or a recommendation. Forward‑looking statements, particularly those concerning geopolitical developments, involve uncertainty and rely on publicly available information and market interpretation.