U.S. Markets:

• Last Friday the Wall Street was closed in observance of the Good Friday holiday. On the previous business day, Nasdaq composite index (CCO:USN) closed the day with a 0.12% loss to 16,379.46, the NYSE composite index (NYA:USY) rose by 0.31% to 18,312.67, the S&P 500 index (SPX:USY) rose by 0.11% to close at 5,254.35, and the Dow Jones Industrial Average index (DJI:DJ) rose by 0.12% to 39,807.37.
• The Dollar Index (DXY), a closely watched gauge of the U.S. dollar’s performance against other major currencies, closed last week at 104.55 marking a 0.5% weekly increase.
• The Brent crude oil (LCO07:USC) closed the previous week at USD 86.97 per barrel, reflecting a weekly 2.5% rise.
• The price of gold (XAU/USD:USC) closed last week with a 3.2% rise, settling at USD 2,232.38 per ounce.
• The 10-year U.S. Treasury yield (USGG10YR:BND) completed the week with a 1.1 basis points increase, settling at 4.21%. The 2-year U.S. Treasury yield (USGG2YR:BND), particularly responsive to Federal Reserve policy rates, finished at 4.62%.

European Markets:

• European stocks finished mostly up on the last working day, as the Stoxx Europe 600 index (SXXP:FR) gained 0.18% to 512.67. The German DAX index (DAX:DEF) rose by 0.08% to 18,492.49, and the French CAC 40 index(PX1:FR) gained 0.01% to 8,205.81.

Asian Markets:

• Stocks in the Asia-Pacific region mostly up on the last working day. The Hang Seng index (HSI:HK) gained 0.91% at 16,541.42, while the Nikkei 225 index (100000018:JPT) rose by 0.50% to 40,369.44 and China’s Shanghai Composite index (000001:CNA) rose by 1.01% to 3,041.17.
• The S&P/ASX 200 Benchmark index (XJO:AU) in the Australian stock market gained 0.99% to 7,896.90.

Let’s take a look at the macroeconomic indicators and developments tracked in the US last week:

• PCE and Personal Income/Spending Data

In the United States, the PCE deflator data for February, which the Fed closely monitors, along with personal income and spending data for February, have been released.

In February, the monthly growth rate of the PCE deflator slowed from 0.4% to 0.3%, while expectations were for it to remain at 0.4%. On an annual basis, it increased from 2.4% to 2.5%.

The core PCE deflator’s growth rate slowed in February from 0.5% to 0.3% on a monthly basis, aligning with expectations. On an annual basis, it slowed from 2.9% to 2.8%, reaching its lowest level in approximately the last three years.

In February, the monthly growth rate of personal income slowed from 1% to 0.3%, compared to expectations of a slowdown to 0.4%. The monthly growth rate of personal spending in February increased from 0.2% to 0.8%, surpassing expectations of a rise to 0.5%.

The annualized quarterly Personal Consumption Expenditures (PCE) price indexes, closely monitored by the Fed as a significant inflation gauge, for Q4 2023 have been announced. Accordingly, the annualized quarterly PCE price index slowed from 2.6% to 1.8% in Q4, indicating a significant easing of price pressures, reaching the lowest level since the second quarter of 2020.

The core PCE price index was slightly downwardly revised from 2.1% to 2% in Q4, maintaining its trend at the lowest levels since the end of 2020.

• GDP Growth Revision

In the United States, the final data for annualized quarterly GDP growth for Q4 2023 has been announced. Growth rate in Q4 was revised upward from 3.2% to 3.4%, surpassing expectations of 3.2%. Looking at the year as a whole, the U.S. economy grew by 2.5% in 2023, in line with revised data, and by 1.9% in 2022.

• Consumer Confidence Indices

The University of Michigan Consumer Confidence Index in March was revised upward from 76.5 to 79.4, reaching the highest level since July 2021. The current conditions sub-index in March was revised upward from 79.4 to 82.5, while the expectations sub-index was revised upward from 74.6 to 77.4. Additionally, consumers’ short-term inflation expectations were slightly downwardly revised from 3% to 2.9%, while long-term inflation expectations were revised downward from 2.9% to 2.8%.

The Conference Board Consumer Confidence Index for March, despite expectations of an increase, declined from 104.8 to 104.7 due to increasing pessimism about future job and labor market conditions, marking its second consecutive month of decline and reaching the lowest level in the last four months.

• Housing Market

From the U.S. housing market data, the pending home sales data, indicating the number of homes for which a sale contract has been signed but the deed transfer has not yet occurred, showed a partial recovery with a 1.6% increase in February following a 4.7% decline in January.

The monthly increase in the S&P/Case-Shiller 20-City Home Price Index slowed from 0.3% to 0.1% in January, reaching its lowest level in the last 11 months.

• Weekly Initial Jobless Claims

In the U.S. labor market data, weekly initial jobless claims for the week ending March 23, despite expectations of a slight increase, fell from 212,000 to 210,000, remaining at historically low levels below historical averages and indicating continued tightness in the labor market.

Wednesday’s focus in the markets will be on Fed Chairman Powell’s speech. Powell’s remarks will be closely monitored for potential new signals regarding the Fed’s monetary policy and possible timing of interest rate cuts.

• Manufacturing and Service Sector PMIs

On Monday, the final PMI data for the S&P Global manufacturing sector for March and the ISM manufacturing PMI data will be released. The final PMI data for the service sector and the ISM non-manufacturing PMI data will be released on Wednesday, providing signals on the recent economic activity outlook.

According to preliminary data, the manufacturing sector PMI increased from 52.2 to 52.5 in March, indicating a slight acceleration in growth and the strongest growth in 21 months. However, the ISM manufacturing index for February fell from 49.1 to 47.8, indicating a slight acceleration in the contraction pace in the manufacturing sector.

In March, the service sector PMI declined from 52.3 to 51.7, signaling a slight slowdown in growth, while maintaining growth in the expansion zone for the past 14 months. Additionally, the ISM non-manufacturing index for February declined from 53.4 to 52.6, indicating a slowdown in growth in non-manufacturing sectors.

• Labour Market Trends

Employment market data will be closely watched for insights into Fed’s monetary policy direction. This includes JOLTS job openings data for February, ADP private sector employment data for March on Wednesday, weekly initial jobless claims data on Thursday, and non-farm payrolls, unemployment rate, and average hourly earnings data for March on Friday.

JOLTS job openings for January saw a slight decline to 8.86 million, indicating a partial slowdown in labor demand. Expectations are for a further decline in February.

ADP private sector employment increased from 111,000 to 140,000 in February, below expectations, with a slight upward revision to the previous month’s data.

Non-farm payroll employment increased by 275,000 in February, exceeding expectations, while January’s data was significantly downwardly revised. The unemployment rate increased to 3.9% in February, reaching its highest level since January last year. Average hourly earnings slowed to 0.1% monthly in February, reaching the lowest level since February 2022. Expectations were for a 0.2% decrease.

• Other Economic Indicators

Today, construction spending data for February will also be monitored for insights into the housing market. Tuesday will see the release of factory orders data for February, providing insights into the production trends. Thursday will feature the release of the February trade balance data.

• Eurozone Consumer Confidence Index

The consumer confidence index for the Eurozone in March showed a slight recovery from -15.5 to -14.9, remaining in negative territory but in line with preliminary data.

• UK GDP Growth for Q4 2023

According to the final data on GDP growth for Q4 2023, the UK economy contracted by 0.3%, consistent with preliminary figures, marking its first recession since 2020 due to the impact of the pandemic. However, the UK economy showed limited growth of 0.1% for the full year of 2023.

• Consumer Confidence, Jobless Rate and Retail Sales in Germany

The GfK consumer confidence index for Germany in April, reflecting assessments for the upcoming month, showed a slight improvement from -28.8 to -27.4 but remained in negative territory, indicating continued weak consumer sentiment.

In Germany, the seasonally adjusted jobless rate remained unchanged at 5.9% in March 2024, holding steady at its highest level since May 2021.

Retail sales in Germany fell by 1.9% monthly in February 2024, missing market expectations and reflecting the impact of elevated inflation and high borrowing costs. Yearly, retail trade decreased by 2.7% in February, marking the fourth successive month of contraction.

• Sweden Policy Rate

The Swedish Central Bank kept its policy rate steady at 4%, in line with expectations

• Focus on ECB Meeting Minutes

Thursday will see the release of the European Central Bank’s meeting minutes for March, which will be the focal point for markets.

In its March meeting, the ECB kept interest rates unchanged, as expected, maintaining them at their current levels for the fourth consecutive meeting.

The decision emphasized that keeping rates at their current levels would make a significant contribution to reaching the inflation target of 2% and that rates would remain sufficiently accommodative for the necessary duration. Accordingly, the ECB kept the main refinancing rate at 4.50%, the marginal lending rate at 4.75%, and the deposit facility rate at 4%.

• Final PMIs and Inflation Trends in Eurozone

Tuesday will also see the release of final PMI data for the manufacturing sector and the services sector for March, providing insights into the latest economic outlook. According to preliminary data, manufacturing PMIs in March remained below the 50 growth threshold due to tightening financial conditions and weak demand. Similarly, service PMIs remained in contraction territory, except for the UK and the Eurozone.

Inflation data, crucial for shaping ECB’s monetary policy, will be released, with preliminary CPI data for March in Germany on Tuesday and for the Eurozone on Wednesday. Preliminary data suggests that in Germany, monthly CPI is expected to increase from 0.4% to 0.6% and decrease annually from 2.5% to 2.2% in March. Meanwhile, in the Eurozone, monthly CPI is expected to increase from 0.6% to 0.9% and maintain a yearly rate of 2.6%.

• Producer Price Index (PPI) and Retail Sales Data

Thursday will see the release of the Producer Price Index (PPI) for February in the Eurozone, with an expected monthly decrease of 0.7% and a yearly decrease of 8.6%. Additionally, retail sales data for February in the Eurozone is expected to show a monthly decline of 0.3%.

• Factory Orders in Germany

On Friday, factory orders data for February in Germany will be released, with an expected increase of 0.6% on a monthly basis.

• China’s Economic Indicators

Profits earned by China’s industrial firms rose by 10.2% year-on-year to CNY 914.06 billion in the first two months of the year, indicating a significant rebound from the 2.3% drop experienced in 2023.

The official NBS Manufacturing PMI in China increased to 50.8 in March 2024 from 49.1 in the previous month, surpassing market expectations and marking the first growth in factory activity in 6 months. Similarly, the official NBS Non-Manufacturing PMI for China rose to 53.0 in March 2024 from 51.4 in the previous month, signaling the 15th consecutive month of expansion in services activity.

Additionally, the Caixin General Manufacturing PMI increased to 51.1 in March 2024 from 50.9 in the previous month, marking the fifth straight month of growth in factory activity.

• Indonesia’s Inflation Rate

The annual inflation rate in Indonesia climbed to 3.05% in March 2024 from 2.75% in February, exceeding expectations and remaining within the central bank’s target range. This was the highest inflation rate since last August, driven primarily by rising food prices.

• Japan’s Economic Indicators

The Bank of Japan’s Tankan index of sentiment among large manufacturers fell to plus 11 in the first quarter of 2024 from plus 13 in the previous quarter, dropping for the first time in a year.

Industrial production in Japan edged down 0.1% monthly in February 2024, missing market consensus.

• India’s External Debt

External debt in India increased to a record high of 648200 USD Million in the fourth quarter of 2023 from 635324 USD Million in the third quarter of 2023.

• Upcoming Economic Events

On Wednesday, the Caixin Services PMI for March in China will provide insights into the activities of small and medium-sized enterprises.

Other indicators to be monitored in the region include the interest rate decision and credit growth from the Reserve Bank of India, Japan’s leading economic index and household spending, and Indonesia’s foreign exchange reserves