Macroeconomics: The Day Ahead for 27 March 2026

As week four of the US/Israel/Iran conflict ends, the US administration’s signalling remains mixed, with comments interpreted by markets as both cautioning against further escalation and extending the pause on attacks on energy infrastructure to April 6 (i.e. after Easter). Market participants generally view Iran as showing limited willingness to enter negotiations at this stage, and there has been reporting that the US has criticised some NATO partners for not participating more actively. At this juncture, there are no clear indications of an imminent end to hostilities.

The ripple effects from the conflict continue to widen, with governments in Asia and Europe suspending regulatory measures, adjusting tax and excise duty regimes, imposing export restrictions and adopting other steps to cushion the impact of higher energy prices. While risk‑asset relief rallies have become more muted, market behaviour still reflects familiar “buy the dip” patterns seen in prior episodes of volatility. Despite emerging stresses in private credit, high‑yield and leveraged loans, risk premia remain below levels seen during 2025’s ‘Liberation Day’ rout—even with a somewhat sharper rise in G7 government bond yields.

There is always a risk that the understandably intense focus on the conflict overshadows other important developments. The ruling finding Meta and Google/Alphabet liable in the first social‑media‑addiction trial has drawn comparisons among commentators to earlier landmark cases, such as those involving the tobacco sector, though outcomes may ultimately differ. It nonetheless carries the potential for long‑term implications. Similarly, the news that Google’s TurboQuant algorithm can cut the memory required to run large AI models by at least a factor of six is a timely reminder that in a rapidly evolving technology cycle, innovation risk remains high. While this could be positive for costs, it also raises the prospect that certain AI‑related business models could face challenges if they fail to adapt quickly.

The day’s data schedule features better‑than‑expected UK Consumer Confidence and Retail Sales, the first national Eurozone HICP print from Spain for March, and softer‑than‑expected ECB Inflation Expectations—unsurprising given this was a February survey, making consensus expectations for an uptick appear somewhat misplaced. The final US Michigan Sentiment reading, expected to revise lower partly due to the protracted Middle East conflict, is the other key point of interest. A handful of Fed and ECB speakers top the event agenda.

Next week will be shortened by the Easter holiday weekend, though the US will publish its monthly labour‑market report on Good Friday, with Consumer Confidence, JOLTS Job Openings and February Retail Sales earlier in the week.