This week’s focus centres on the IMF-World Bank Spring Meetings (Mon–Sat) alongside the start of US earnings season, with Wall Street results offering key insight into corporate resilience. As ever, the geopolitical backdrop remains a critical driver for markets amid a deadlock in US-Iran peace talks.
The data calendar begins today with US existing home sales. Tuesday brings China trade data, and later US PPI and the NFIB small business optimism survey. The IMF’s World Economic Outlook and Global Financial Stability Report will be closely watched, while central bank speakers include the ECB’s Lagarde, Makhlouf, BoE’s Bailey and a host of Fed officials including Goolsbee, Barr, Barkin, Collins and Paulson. Midweek, attention turns to eurozone industrial production, the US Empire State manufacturing survey, and the Fed’s Beige Book. The IMF’s Fiscal Monitor will also be released, with further central bank commentary from policymakers including the Fed’s Bowmann and Barr, the ECB’s Galhau, Schnabel and Escrivá. Thursday is the busiest day in terms of data, headlined by China’s GDP, retail sales, and industrial production data. In Europe, eurozone CPI and UK industrial production and trade figures are due, while in the US markets will focus on initial jobless claims and industrial production. Additional remarks from policymakers, including John Williams, are also scheduled. Friday is comparatively quiet, with eurozone trade balance data rounding out the week.
Last week market sentiment was dictated by a mix of geopolitical repricing and shifting inflation expectations. The announcement of a US–Iran ceasefire drove a sharp improvement in risk sentiment, triggering a broad-based equity rally and a notable pullback in oil prices; Brent fell 12.68%, to $95.20pb, and is back up above $100pb this morning. The S&P 500 gained 3.56%, while lower energy prices helped unwind inflation concerns and pulled Treasury yields lower, the yield on the 10-year strengthened 3bps to 4.32%. Meanwhile, the dollar, DXY Index, fell 1.38% amid temporary ceasefire hopes and lower energy prices reducing safe-haven demand.
Easing geopolitical risk shifted market focus back on the inflation outlook and the policy path for the Fed amid stagflation concerns. The March CPI report confirmed that energy volatility is feeding through, with headline inflation jumping to 3.3%yoy. While the 0.9% monthly surge was the largest since 2005, primarily driven by a 18.9% annual spike in gasoline, markets found a small anchor in core CPI, which held relatively steady at 2.6%. That optimism was quickly undermined by a sharp deterioration in the University of Michigan Consumer Sentiment Index, which fell to a record low. This collapse in confidence, paired with the one-year inflation expectations leaping to 4.8%, suggests that high prices at the pump are severely damaging the American consumer’s outlook.
The World Bank has adopted a more cautious outlook, now forecasting growth in emerging and developing economies to slow to 3.65% in 2026 (down from 4.0% previously), with downside risks potentially dragging it as low as 2.6% in a prolonged conflict scenario. At the same time, inflation is expected to rise to 4.9%, up sharply from 3.0%, highlighting how the conflict is increasingly manifesting as a broader global supply-side shock.
Elsewhere, China’s macro landscape shifted as PPI data finally turned positive (+0.5%) after a 41-month deflationary streak, while CPI moderated to 1.0% post-holiday. On the policy front, the PBOC reaffirmed a “moderately loose” stance, signalling room for further RRR and interest rate cuts to meet the 5% GDP growth target as markets look ahead to the Q1 GDP release (forecasted at 4.8%). Meanwhile, the renminbi showed resilience, benefiting from the broader dollar weakness and a narrowing yield gap, with officials reiterating they have “no intention” of using currency depreciation for trade advantages.
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