Markets weekly outlook – Tariff rollercoaster continues, ECB rate decision and inflation data in focus
The upcoming week will focus on U.S. President Donald Trump’s plans for new tariffs. Alongside this, markets will also watch U.S. jobs data, an Australian central bank meeting, and a key eurozone inflation report.
Asia Pacific Markets
The main focus this week in the Asia Pacific region will be Japanese inflation and a host of data releases from China.
In Japan, inflation is expected to rise, but the Bank of Japan (BoJ) is likely to keep its rate cuts on hold. Goods being shipped early to the US are expected to boost machinery orders and exports.
However, this positive trend might not last beyond the first quarter due to tariff uncertainties. Consumer prices are predicted to go up in March, mainly due to higher service costs. Earlier fresh food price hikes are also expected to show up in eating-out and processed food costs. The BoJ will keep a close eye on how US tariff policies affect the economy while maintaining current rates for now.
It’s a busy data week in China as the country grapples with the escalating trade war with the US. None of the tariffs so far are expected to show any impact on the data yet but should do so moving forward.
China will release key data for March, including first-quarter GDP on Thursday. A 5.3% year-on-year growth is expected, though this is before tariffs start impacting from the second quarter. For now, domestic activity seems steady, with retail sales and industrial production likely to grow by 4.5% and 6.0%, respectively. Fixed-asset investment is expected to stay mostly stable at 4.0%. Trade is slowing as tariffs take effect, but bigger impacts may come later.
Property prices will also be watched to see if market volatility has pushed them down further. Supporting domestic demand is the focus this year, though falling home prices make it hard to boost household confidence. While prices in major cities have stabilized, it’s unclear if this is the bottom.
Meanwhile, all attention is on how China will respond to the 145% tariffs imposed by Trump with a 125% tariff on US goods due to start on April 12.. The market expects possible rate cuts, lower reserve requirement ratios (RRR), and new fiscal policies to support domestic demand.
In the Pacific region we have some high impact data from both Australia and New Zealand. On Tuesday we have the RBA minutes followed by Wednesday’s New Zealand CPI release. The week ends on Thursday with employment data out of Australia.
