Closing Recap

Wall Street faced significant declines last week, capping off a negative period driven by persistent worries over inflation, trade tensions, and potential slowing growth, extending the market’s recent pullback. Investor sentiment soured considerably last week, leading to broad market declines. The factors driving this pessimism – persistent inflation concerns, questions around the sustainability of the AI-driven rally, signs of slowing consumer spending, and the looming threat of escalating trade tariffs – culminated in a rough end to the week, marking the fifth down week in the last six for the S&P 500 since its mid-February highs. 

Looking Ahead

The week ahead promises to be eventful, dominated by the critical US tariff decisions set for Tuesday/Wednesday, which carry significant implications for global trade, inflation, and market sentiment. Alongside this, traders will closely parse key economic health indicators, particularly the US ISM PMIs and the highly anticipated US Jobs report. Central bank actions, including the RBA decision and insights from ECB minutes, will further shape the outlook for monetary policy amidst these evolving economic and geopolitical crosscurrents. Expect potential volatility as markets digest this dense flow of information.

Key Takeaways: 

• Market Sentiment Weakens: Major indices fell sharply as inflation fears, AI bubble concerns, slowing consumer activity, and upcoming tariff impacts weighed on investors. 
• US Trade Policy in Focus: All eyes are on the upcoming US trade policy review completion (Tuesday) and potential tariff implementation (Wednesday), dubbed “Liberation Day,” particularly concerning Mexico, Canada, and China. 
• Packed Economic Calendar: Crucial economic data releases include US ISM Manufacturing and Services PMIs, the US Jobs Report, EZ Flash CPI, and Chinese PMIs.
• Central Bank Activity: The RBA is set to announce its rate decision, the ECB will release minutes from its last meeting, and attention remains on the potential RBNZ Governor appointment. 
• Global Growth Signals: Manufacturing and Services PMIs from China, Japan, the Eurozone, the UK, and the US will provide updates on global economic health amidst trade uncertainties. 

Market Overview 

Looking ahead, the market faces a confluence of potentially pivotal events. The most significant near-term catalyst is the US Trade Policy Review and potential Tariff Implementation (Tue/Wed). Following federal agency reviews due Monday, April 2nd (“Liberation Day”) could see substantial new tariffs, possibly around 25% on autos and levies on agricultural products, alongside the expiry of temporary relief for Canada and Mexico and the implementation of reciprocal tariffs. 

Index	Last	Change	% Change
DJ Industrials	41583	-715.8	-0.0169
S&P 500	5580	-112.37	-0.0197
Nasdaq	17322	-481.04	-0.027
Russell 2000	2023	-42.42	-0.0205

Against this backdrop, key economic indicators will provide crucial insights into the economy’s resilience. The US ISM Manufacturing PMI (Tue) is expected to remain roughly stable near the 50 mark, separating expansion from contraction.The week culminates with the critical US Jobs Report (Fri). Consensus expects a slowdown in payroll growth (around 128k) and a slight uptick in the unemployment rate (to 4.2%). Wage growth (Avg. Hourly Earnings) will be scrutinized for inflationary pressures. Fed Chair Powell is scheduled to speak after the report, likely offering commentary on the labor market’s health in the context of recent data and the Fed’s policy outlook. 

Central banks remain active. The ECB Minutes (Thu) will offer details on the Governing Council’s debate during their last meeting where they cut rates by 25bps but signaled a less restrictive stance. Insights into the discussion around future cuts versus pauses, especially considering the potential inflationary impact of US tariffs, will be key, though the minutes may be slightly dated given the fast-moving trade situation. The RBA Announcement (Tue) is widely expected to result in rates being held steady after February’s cut, with officials recently signaling caution about further easing. Markets will also watch for any developments regarding the potential appointment of an interim RBNZ Governor (Tue). 

Economic Data Calendar (Week of March 31 – April 4th)

• MON: Japanese Activity Data (Feb), Chinese NBS PMIs (Mar), German Retail Sales (Feb), German Prelim CPI (Mar), US Chicago PMI (Mar) 
• TUE: Completion of US Trade Policy Review, RBA Announcement, Potential RBNZ Governor Appointment Decision, Japanese Tankan Survey (Feb), South Korean Trade Balance (Mar), Chinese Caixin Manufacturing Final PMI (Mar), EZ Flash CPI (Mar), US ISM Manufacturing (Mar), EZ/UK/US Final Manufacturing PMIs (Mar) 
• WED: US Tariff Implementation, South Korean CPI (Mar), US ADP Employment (Mar), US Durables (Feb) 
• THU: ECB Minutes, Chinese Caixin Services & Composite Final PMI (Mar), EZ/UK/US Final Services & Composite PMIs (Mar), EZ Producer Prices (Feb), Canadian Trade Balance (Feb), US ISM Services PMI (Mar) 
• FRI: Swedish CPIF (Mar), US Jobs Report (Mar), Canadian Jobs Report (Mar) 

Commodities, Currencies, and Treasuries:

In the commodity space, oil prices (WTI & Brent) experienced modest declines while gold prices surged, potentially reflecting increased safe-haven buying amid market uncertainty. Currency markets saw the Euro gain slightly against the US Dollar, whereas the Japanese Yen showed significant strength against the Dollar. Meanwhile, the US 10-Year Treasury yield decreased notably, signaling heightened demand for government bonds often associated with market stress and shifting growth or rate expectations.

Asset	Last	Change	Unit / % Change
WTI Crude	69.36	-0.56	USD/bbl
Brent Crude	73.63	-0.4	USD/bbl
Gold	3114.3	23.4	USD/oz
EUR/USD	1.0827	0.0026	Rate
USD/JPY	149.93	-1.12	Rate (USD/JPY)
10-Year Note	0.04259	-0.11	Yield (%)