While investors will focus more on banking crises and central banks` measures, speakers in different countries will try to explain the situation in more detail. We will also have the European inflation numbers and the Fed`s favored measure of inflation in the US on Friday, which must give us a brighter perspective of future policies.
1- US Consumer Confidence - Tuesday
After the December increase, we expect US consumer confidence to decrease again. The market expects March CB consumer confidence to fall to 101.1 from 102.9 in February. With these data, the average of the recent 12 months of the CB Consumer Confidence Index will fall to 104, far less than the 129 average of pre-pandemic. Considering the current banking tensions, it will be hard to believe that consumer behavior and confidence can change positively in the short term.
2- Eurozone Inflation and Employment - Friday
March inflation is expected to increase by 1%, but on the annual scale, inflation can decrease to 7%. Conversely, the Core inflation is expected to rise monthly and annually. Annual Core CPI is expected to increase by 5.7%. With no change expected in the unemployment rate at 6.7%, inflation does not fall that fast in the following months. As officials state in their press conference following a 50 bps rate hike, inflation will be the ECB`s priority to control. However, considering the recent banking collapse and IMF`s warnings, the outlook could be a bit cloudier.
3- US Personal Income & Spending - Friday
With the strong labor market data we saw in the February NFP numbers and recent initial jobless claims, we expect personal income and spending to rise by 0.3% in February, less than in January. This backward should also be seen in the headline and Core PCI price indexes. Since we have banking concerns, if Fed favorable inflation decrease, market participants will raise the possibility of a sooner rate hike pause, which will favor the stock market, but pressure the US dollar.
4- Central banks` speakers - Across the week
Investors and market participants need a brighter idea of what central banks are up to doing. During the week ahead, officials from major central banks in Europe, Asia, and the US will give a speech. Therefore, these speeches will be very important to watch and follow the market reactions.