War and many other concerns
While the first quarter of 2022 is going to end this week, the war in Ukraine, Inflation Concerns, Energy crises, and fears of economic recovery progress, sounds like will be with us to move to the second quarter. And this week will be even more important with Inflation numbers in the US and EU and NFP numbers on the first day of April on Friday.
US Jolts & CB Consumer Confidence - Tuesday
While we are waiting for US employment data on Friday, Jolts will be very important to know the labor market situation. If February Jolts also become more than 11Million, same as January, it means that the labor shortage continues. On the consumer confidence front, Tuesdays' CB estimates are expected to show a fall to a 13-month low of 105.0 in March, compared with 110.5 in February. Overall expected data are not in favor of US stock markets.
US Personal Income & Spending - Thursday
Personal income and spending, both are expected to ease in February, as the monthly child tax credits ended and higher inflation in January and February changed the consumers' habits. We should not forget that PCE inflation expected at 0.6% in February means that real income will be even more under pressure, and with increasing worries about economic developments, people will be much more cautious about spending their savings. With estimated data, the US dollar will be under pressure.
China Purchasing Manager Index - Thursday
Last week in Europe, March PMI data were positive and ignored the concerns over the possible effects of the Russia - Ukraine conflict. But for the coming PMI data from China, it is not just about the war effect. Due to the Chinese COVID-Zero policy, some cities including Shanghai were in lockdown, and some other restrictions still remain in place to combat the spread of the virus. In addition, there are downside risks from a slump in the real estate sector and regulatory crackdowns. Therefore, the outlook is not much positive for February economic data from China, which must have more pressure on Chinese stocks markets and Yuan!
Eurozone inflation - Friday
Europe is the biggest economic victim of the war in Ukraine! European production and life, directly depend on Russian Oil and Gas and this conflict increased the global energy costs, which is expected to show European inflation pressures continuing to heat even more than other parts of the globe. Eurozone March inflation is expected to increase by 6.5%, which means more pressure on ECB’s next meeting to start some changes in its policies and find a way to stop it, most probably with the faster lowering the tapering of its bond purchases. European stock markets will not be happy with these numbers.
US Employment data - Friday
Fewer restrictions around COVID and financial needs put the people under pressure to go out and look after the job, which cased 582K newly created jobs in the past three months on average. While hiring among small businesses is expected to fall to a one-year low in February, overall Nonfarm Payrolls also must decrease from 3 months average, down to 475K in March, from 678K created jobs in January. However, even that much increase in the labor market will be enough to decrease the unemployment rate down to 3.7% and lift the hourly earnings to 0.4%. Better than expected NFP data must increase the stock markets and vice-versa.
