Macroeconomics: The Day Ahead for 6 March 2026

Once again what is a busier day for data and central bank speakers is likely to be rendered largely nothing more than passing news due to the conflict in the Middle East. The US monthly labour report for February and January Retail Sales top the statistical run, which also has South Korean CPI and final Eurozone Q4 GDP, while Fed speakers are more than plentiful just ahead of their pre-FOMC meeting purdah period as of tomorrow. There remains little clarity over what the US administrations is aiming to achieve in the conflict, with a good deal of mixed and sometimes conflicting signals in its messaging, per se it is difficult to discern where its ‘off ramps’ may lie. The disruptions to supply chains are multiplying rapidly, with petrochemicals and fertilizers perhaps seeing the most immediate impact outside of aviation. One thing to bear in mind with so many refineries and natgas production sites being suspended is that while shutting down output can be completed quite quickly, restoring output at these sites will take weeks, and delivery of feedstock to plants elsewhere even longer. A further consideration, for which there are plenty of good examples during the pandemic, is that some older plants may not be re-opened, if the high cost of restoring output is unlikely to be recouped from future operations. Fortunately a good deal of the capacity in the GCC area is quite new.

** U.S.A. – February labour market report, January Retail Sales **

– For what it’s worth, Payrolls are expected to slow to 55K, after the sharp unexpected 130K surge in January, and 60K in Private Payrolls. The scope for an outlier is large, with factors ranging from a mean reversion to January’s surge that was boosted by mild weather, through the early February winter storm, annual changes to the Census Bureau’s ‘birth and death rates’ calculation, a strike at a health care provider (Kaiser Permanente), a surge in WARN (Worker Adjustment and Retraining Notification) notices in January as well as Challenger Layoffs, to a more general signal from business surveys that many companies’ hiring intentions were weak. The Unemployment Rate is seen unchanged at 4.3%, while Average Hourly Earnings are forecast at 0.3% m/m for an unchanged 3.7% y/y. Given all the potential noise, extrapolations from today’s report about trends would have been something of a fool’s errand, even if there was no Middle East conflict. January Retail Sales are expected to tag onto the weakness seen in December, with weak auto sales weighing on headline at -0.3% m/m, with ex-Autos & Gas seen rising 0.2% m/m and core ‘Control Group’ 0.3% m/m. Cold weather and a typical post-holiday hangover imply risks are skewed to the downside, despite some likely support from seasonal sales, though in recent years that boost has proven to be rather modest. All of this matters little in terms of the outlook for Fed policy, which will primarily be focussed on the fall-out from the Middle East conflict, as well as the SCOTUS ruling on trade tariffs, and over the longer run the impact of AI on hiring.