Switzerland’s KOF Economic Barometer rose to 103.9 in March, beating expectations of 102.6 and up from revised 102.6 in February. The index has remained above its medium-term average since the start of the year, reinforcing the view that the Swiss economy “remains robust”.
KOF noted that improvements were broad-based, with stronger signals coming from manufacturing, services, and construction. Private consumption indicators also showed improvement while foreign demand remains unchanged.
UK retail sales volumes jumped 1.0% mom in February, far surpassing market expectations for -0.3% mom decline.
The gain was driven by strong performances across all non-food store categories, including department stores, clothing, and household goods, suggesting consumers were more willing to spend on discretionary items. The only notable drag came from supermarkets, where sales volumes dipped slightly following a solid increase in January.
Looking at the broader trend, sales volumes rose 0.3% in the three months to February compared to the previous three-month period, and were up 2.0% from the same period a year earlier.
Germany’s GfK Consumer Sentiment for April ticked up slightly from -24.6 to -24.5, falling short of expectations at -22.2.
According to Rolf Bürkl of the NIM, the minor improvement may reflect “lessened pessimism” following recent elections and the hope for a stable new government. However, willingness to save continues to signal significant uncertainty among German households.
Bürkl emphasized that “fast formation of a government and the early adoption” could play a key role in boosting consumer confidence and spending ahead.
In Japan, Tokyo’s CPI core, which excludes fresh food, rose from 2.2% yoy to 2.4% yoy in March, surpassing expectations of 2.2% yoy. Even more notable was the rise in the core, core measure, which strips out both food and energy—climbing from 1.9% yoy to 2.2% yoy, signaling broader-based inflation. Headline inflation also ticked higher to 2.9% yoy from 2.8% yoy.
The key driver behind the spike was food prices, which surged 5.6% yoy, the fastest pace since January 2024. A standout was the massive 92.4% yoy jump in rice prices, the steepest rise since 1976.
Adding to the inflationary pressure was the services sector, where prices rose 0.8% yoy, up from 0.6% yoy in February. Rent prices, a key component, increased by 1.1% yoy, the sharpest rise since 1994.
The Summary of Opinions from BoJ’s March monetary policy meeting revealed growing concerns over the fallout from US trade policy, particularly the risk that new tariffs could negatively impact Japan’s real economy.
One board member warned that downside risks from the US have “rapidly heightened”. I f tariff issues worsen, it could have a “negative impact” on Japan’s real economy. BoJ should be “particularly cautious” when considering further interest rate hikes if trade tensions escalate.
Other members echoed similar concerns, citing elevated uncertainty from tariff threats, global supply chain disruptions, and stiff competition from low-priced Chinese products.
The tone suggests policymakers are carefully monitoring how these factors affect inflation expectations, wage growth, and investment—particularly among SMEs.
A separate opinion suggested that as underlying CPI inflation edges closer to the 2% target, BoJ should prepare to shift from accommodative to “neutral” policy.
Overall, BoJ still sees a path toward rate normalization—contingent on its inflation outlook materializing—but recent developments in global trade and domestic firm performance will dictate the pace and timing of the next move.
Richmond Fed President Tom Barkin noted that the fast-moving policies of the new administration, particularly around tariffs, have created a “dense fog” of uncertainty. While acknowledging that recent high inflation could amplify the impact of new tariffs, he noted that the ultimate effect remains unknowable given the lack of clarity on final tariff rates and the responses of global actors.
Barkin warned that this heightened uncertainty is already weighing on sentiment. He explained that for consumers and businesses to spend and invest, “they need to have a certain level of confidence”. Without that, demand may quiet, particularly as markets navigate the unknowns tied to policy shifts and geopolitical developments.
“It’s not an everyday ‘forecasting is hard’ type of fog,” he said, but rather one that demands a cautious approach—“a ‘zero visibility, pull over and turn on your hazards’ type of fog.”
In this context, Barkin reiterated that the Fed’s current moderately restrictive stance remains appropriate. “We are waiting for the fog to clear,” he concluded.
Boston Fed President Susan Collins expressed her full support for Fed to keep interest rates unchanged last week, noting that continued economic uncertainty and inflation risks warrant a cautious approach.
Collins said that with upside risks to inflation still present, it would likely be appropriate to maintain current policy settings “for a longer time”. She stressed the importance of “active patience” and flexibility as Fed monitors the evolving economy.
One of the key factors now clouding the outlook is tariffs. Collins acknowledged that new tariffs will almost certainly raise inflation in the near term. However, the longer-term implications depend heavily on how other countries react and whether businesses pass costs onto consumers. These elements could determine whether the inflationary shock is temporary or more persistent.
US initial jobless claims fell -1k to 224k in the week ending March 22, versus expectation of 225k. Four-week moving average of initial claims fell -5k to 224k. Continuing claims fell -25k to 1856k in the week ending March 15. Four-week moving average of continuing claims rose 2k to 1870k.
Also released, goods exports rose 4.1% mom to USD 178.6B, seasonally adjusted, in February. Goods imports fell -0.2% mom to USD 326.5B. Trade balance reported USD 147.9B deficit, larger than expectation of USD 134.6B.
Q4 GDP growth was finalized at 2.4% annualized. GDP price index was finalized at 2.3%.
Belgian ECB Governing Council member Pierre Wunsch suggested that pausing rate cuts in April should at least be “on the table”, and highlighted how tariff-induced stagflation poses a policy dilemma.
Wunsch warned that tariffs would complicate ECB’s path forward: “To the extent that tariffs will impact the economy … this will have an impact on our decision-making,” he noted.
While downplaying the immediate importance of April’s tariff development, Wunsch stressed that “It’s going to have an impact over the medium term.”
In contrast, Latvian Governing Council member Martins Kazaks suggested that if ECB’s baseline scenario holds, a “gradual reduction in rates in the future” could be expected.
BoC’s March 12 Summary of Deliberations revealed that the decision to cut the policy rate by 25 bps to 2.75% was driven primarily by “tariff threats and elevated uncertainty”.
Governing Council members acknowledged that, under normal circumstances, holding the rate at 3% would have been appropriate. However, the impact of steel and aluminum tariffs, additional tariff threats, and the unpredictable stance of the US administration had begun to materially affect business and consumer decisions. This was “significantly weakening the near-term outlook”.
Looking ahead, BoC emphasized the complexity of the situation and the fluid nature of trade tensions. “It would not be appropriate to provide guidance on the future path for the policy interest rate,” the minutes noted.
St. Louis Fed President Alberto Musalem warned that while the initial effects of import tariffs may be short-lived, their broader inflationary impact could linger. He stressed concern that underlying inflation may be influenced more persistently than expected, and if so, Fed might have to consider a tighter policy stance.
Although this isn’t his baseline scenario, Musalem emphasized that the Fed must remain vigilant to second-round effects from tariffs.
He noted that if inflation stays above the 2% target and the economy remains strong, the current “modestly restrictive” monetary stance would need to be maintained longer.
More significantly, “If the labor market remains resilient and the second-round effects from tariffs become evident, or if medium- to longer-term inflation expectations begin to increase actual inflation or its persistence, then modestly restrictive policy will be appropriate for longer or a more restrictive policy may need to be considered,” he said.
US durable goods new orders rose 0.9% mom to USD 289.3B in February, much better than expectation of -0.7% mom fall.
Ex-transport orders rose 0.7% mom to USD 190.9B, above expectation of 0.4% mom. Ex-defense orders rose 0.8% mom to USD 271.3B.
Transportation equipment led the increase, up 1.5% mom to USD 98.3B.
French ECB Governing Council member Francois Villeroy de Galhau signaled there is “still scope for further easing,” though he emphasized that the pace and magnitude remain uncertain.
Speaking to Frankfurter Allgemeine Zeitung, Villeroy acknowledged that current market expectations of ECB rates around 2% by summer represent a “possible scenario,” considering Europe’s summer period spans from June through September.
He also addressed recent tightening in financial conditions, noting that the rise in long-term bond yields—triggered by Germany’s massive defense and infrastructure spending plans—must be factored into ECB’s monetary policy assessment.
The spending surge, aimed at countering a perceived US retreat in global leadership, has raised concerns about its inflationary impact. However, Villeroy downplayed those risks, arguing that Europe’s weak domestic demand could offset inflationary pressure from higher public expenditure.
He added that if such fiscal spending is coupled with expanded industrial supply, the inflation impact would likely be limited.
Italian ECB Governing Council Member Fabio Panetta urged the central bank to steer its attention toward inflation projections rather than attempting to anchor policy decisions on the elusive concept of the “neutral interest rate” or R-star.
In a letter to the Financial Times, Panetta argued that the neutral rate is an invisible target that can only be approximated using models and surveys that are “riddled with uncertainty,” especially in today’s volatile environment.
Panetta warned against ECB becoming “fixated” on labeling its stance as restrictive based on R-star estimates, calling. Instead, he emphasized that the ECB’s efforts should remain firmly grounded in assessing inflation data and determining whether monetary policy is appropriately calibrated to bring inflation sustainably back to the 2% target.
UK CPI slowed from 3.0% yoy to 2.8% yoy in February, below expectation of 2.9% yoy. CPI Core (excluding energy, food, alcohol and tobacco) fell from 3.7% yoy to 3.5% yoy, below expectation of 3.6% yoy.
CPI goods annual rate slowed from 1.0% to 0.8%, while the CPI services annual rate was unchanged at 5.0%.
On a monthly basis, CPI rose by 0.4% mom.
Chicago Fed President Austan Goolsbee warned that a shift in market-based long-run inflation expectations toward the elevated levels seen in consumer surveys, such as the University of Michigan’s, would be a “major red flag” demanding immediate Fed attention.
He emphasized that if investor sentiment converges with households’ expectations, now at the highest since 1993, Fed would have little choice but to respond.
Goolsbee noted that Fed has moved into “a different chapter” marked by heightened uncertainty, contrasting with the “golden path” of 2023 and 2024, when inflation eased without damaging growth or jobs.
While he still sees interest rates being “a fair bit lower” in the next 12–18 months, he acknowledged that economic unpredictability, particularly surrounding trade policy, may delay Fed’s next move. His stance: “wait and see is the correct approach,” though not without costs.
In conversations with business leaders, Goolsbee said April 2—the date of expected US tariff announcements—has become a key flashpoint of anxiety. This uncertainty, he said, is fueling a broad hesitancy in investment and hiring decisions across the Fed district.
US Copper prices surged to fresh record highs, driven by rising expectations that President Donald Trump may soon impose tariffs on copper imports.
Traders are responding to signals that the Commerce Department’s review—ordered by Trump in February—is advancing quickly, and that a decision, possibly imposing tariffs of up to 25%, could be announced within weeks.
The surge reflects not only speculative buying but also a defensive scramble as traders and manufacturers brace for supply disruptions. A key driver of the move is fear, with the current rally taking the form of a classic fifth-wave extension seen in commodity markets—when panic buying exacerbates already tight conditions.
Technically, the uptrend from January low at 3.9667 is now in its final leg of a five-wave sequence. While there may still be some upside left, strong resistance lies ahead.
Despite the bullish momentum, Copper should soon face strong resistance soon. Two key projection levels—5.538 (161.8% of the 4.1568 to 4.8168 move from 4.4702) and 5.6298 (100% projection of 3.5021 to 5.1650 from 3.9667)—form a crucial zone that should cap the rally.
Australia’s monthly CPI eased to 2.4% yoy in February, slightly below expectations of 2.5% yoy and marking a step down from the steady 2.5% yoy pace seen over the past two months.
Core inflation measures also softened, with the trimmed mean slipping from 2.8% yoy to 2.7% yoy. CPI excluding volatile items and holiday travel eased from 2.9% yoy to 2.7% yyo.
The largest contributors to annual inflation were food and non-alcoholic beverages (+3.1%), alcohol and tobacco (+6.7%), and housing (+1.8%).
Still, the overall slowdown adds to the case for RBA to remain on hold at its upcoming meeting. The central bank has made it clear that February’s rate cut does not set an automatic path for further easing. With the more comprehensive Q1 CPI data still to come, today’s numbers are unlikely to shift policy expectations in a meaningful way.
BoJ Governor Kazuo Ueda emphasized today that the central bank remains “vigilant” to upside surprises in “underlying inflation.
While recent “very high” inflation has been driven largely by temporary factors like import costs and food prices, there’s still a possibility that underlying inflation could accelerate more quickly than expected.
Ueda warned that if such “broad-based inflation” materializes, BoJ would need to respond by raising interest rates and even take “stronger steps”.
However, for now, he reaffirmed the view that underlying inflation remains “just a bit” short of the 2% target, though it is on track to gradually converge to that level.
Meanwhile, data released today showed Japan’s services producer price index rose 3.0% yoy in February, a deceleration from January’s 3.2% and below expectations of 3.1%.
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Canadian GDP grows 0.4% mom in Jan, but Feb flatline tempers momentum
Canada’s GDP expanded by 0.4% mom in January, outpacing expectations of a 0.3% mom gain. Growth was broad-based, with 13 of 20 sectors contributing.
Goods-producing industries led the charge, rising 1.1% mom, the strongest monthly gain since October 2021, as all major components saw expansion. Services-producing industries posted a more modest 0.1% mom increase.
However, early estimates for February point to a flat reading, suggesting a pause in momentum. Strength in manufacturing and financial services was offset by pullbacks in real estate, oil and gas, and retail trade.
Full Canada GDP release here.