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Eurozone PMI composite finalized at 50.9, steady but shaky

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    ActionForex.com
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    Eurozone’s private sector continued to show signs of stabilization in March, with PMI Composite finalized at 50.9 — the highest in seven months — up from February’s 50.2. PMI Services was finalized at 51.0, up from prior month’s 50.6.

    Among the major economies, Germany stood out with a 10-month high at 51.3, while France remained in contraction despite improving to a five-month high at 48.0.

    Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, acknowledged that recession fears that loomed late last year are now giving way to cautious optimism. The Eurozone has managed to stay in growth territory for three straight months.

    Still, he warned that this fragile recovery could be easily thrown “off course again” by external shocks — namely, the newly announced US reciprocal tariffs.

    Full Eurozone PMI final release here.

    ECB’s Nagel and Stournaras warn of economic fallout from US tariffs

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      ActionForex.com
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      Bundesbank President Joachim Nagel issued a strong warning today, saying the US administration’s new tariff measures “endanger global economic stability.”

      Nagel emphasized the need for strong alliances and fewer trade barriers to tackle today’s global challenges, adding that the US is pursuing a “completely different direction” with economic policies that could leave many losers—especially within its own borders.

      Echoing these concerns, Greek ECB Governing Council member Yannis Stournaras said the US tariffs are expected to weigh on Eurozone GDP growth rate by 0.3% to 0.4% in the first year, though he noted that the broader inflation outlook remains unaffected.

      Stournaras added that the US tariffs were “not an obstacle” to an ECB rate cut in April.

       

      Swiss CPI unchanged at 0.3% yoy in Mar, misses expectations

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        ActionForex.com
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        Swiss consumer inflation remained subdued in March, with headline CPI unchanged on the month, below the expected 0.1% mom rise. Core CPI (excluding fresh and seasonal products, energy and fuel) rose just 0.1% mom. The breakdown showed a -0.1% mom decline in domestic product prices, offset somewhat by a 0.5% mom rise in prices of imported products.

        On an annual basis, headline CPI held steady at just 0.3% yoy, missing expectations for an uptick to 0.5% yoy. Core inflation also remained unchanged at 0.9% yoy. The slight increase in domestic product inflation from 0.9% yoy to 1.0% yoy suggests some persistence in local cost pressures. But overall imported inflation remains deeply negative at -1.7% yoy, down from -1.5% yoy.

        Full Swiss CPI release here.

        China’s Caixin PMI services rises to 51.9, but deflation and jobs remain concerns

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          ActionForex.com
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          China’s Caixin Services PMI ticked up to 51.9 in March from 51.4, while Composite PMI rose to 51.8 from 51.5, marking the 17th consecutive month of expansion.

          According to Caixin Insight Group’s Wang Zhe, both supply and demand showed improvement, particularly in manufacturing. However, service sector employment dragged overall job growth, and price pressures remained weak.

          Despite signs of recovery and a stable start to the year, persistent deflationary pressures and a sluggish job market continue to weigh on sentiment. Wang noted that weak domestic demand and cautious market expectations were limiting momentum.

          Full China Caixin PMI services release here.

          Japan’s PMI composite finalized at 48.9, back in contraction

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            ActionForex.com
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            Japan’s services sector lost momentum in March, with the final PMI Services reading falling to the neutral mark of 50.0, down sharply from 53.7 in February. Composite PMI dropped to 48.9—its lowest since November 2022—signaling contraction in overall private sector activity.

            S&P Global’s Annabel Fiddes noted that while new orders and export business in services remained in growth territory, market conditions had clearly softened.

            Additionally, input costs across the private sector rose at the fastest pace in seven months, and output price inflation remained historically elevated.

            Business sentiment also deteriorated, with overall optimism about the year-ahead outlook for output falling to its lowest since January 2021.

            Full Japan PMI services final release here.

            US ADP jobs grow 155k, pay growth cools further

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              ActionForex.com
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              US ADP private sector employment rose by 155k in March, exceeding expectations of 120k. There were 24k positions added in goods-producing sectors and 132k in services.

              Employers of all sizes contributed to the growth, with small firms leading the way, adding 52k jobs, followed by large and medium-sized businesses with 59k and 43k respectively.

              Despite the strong employment numbers, wage growth continued to decelerate. Year-over-year pay gains slowed to 4.6% for job-stayers and 6.5% for job-changers. The premium for switching jobs fell to 1.9 percentage points—the lowest in the series since September.

              ADP Chief Economist Nela Richardson commented that despite “policy uncertainty and downbeat consumers,” the headline job number was a positive indicator for the economy and businesses of all sizes.

              Full US ADP release here.

              ECB’s Schnabel: Trade fragmentation risks rekindling inflation, hitting growth

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                ActionForex.com
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                ECB Executive Board member Isabel Schnabel warned today that a global trade war could cause a sharp resurgence in inflation and weigh heavily on growth.

                In a speech, she highlighted that a severe disruption in global trade flows could lift inflation by several percentage points in the early years.

                She added that even a “mild decoupling” scenario would still have a meaningful impact—adding up to 1% to inflation and taking years to unwind.

                ECB’s Lagarde: Tariffs harmful globally, often lead back to negotiation table

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                  ActionForex.com
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                  ECB President Christine Lagarde warned that the global effects of US-led tariffs will be “negative,” though the extent of the damage depends heavily on the scope, duration, and targeted products.

                  In an interview with Ireland’s Newstalk radio, she emphasized that the broader implications for global trade and growth would vary, but the potential for lasting disruption is real.

                  Lagarde also noted that history shows such trade escalations often end in talks rather than prolonged battles.

                  “Quite often those escalation of tariffs, because they prove harmful, even for those who inflict it, lead to negotiation tables,” she said, suggesting that any initial damage might eventually give way to diplomatic resolutions and the removal of trade barriers.

                  BoJ’s Ueda: US tariffs pose short-term inflation risk, long-term growth uncertainty

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                    ActionForex.com
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                    BoJ Governor Kazuo Ueda said today that the ramifications of US tariff policy remain “highly uncertain” and could significantly affect global trade.

                    Speaking to Japan’s parliament, Ueda emphasized that the ultimate impact would depend on the “range and scale” of the tariffs being implemented. He also noted that beyond trade flows, a key concern lies in “how the tariffs could affect the sentiment and spending of households and companies.”

                    Ueda further highlighted that while US inflation may rise in the short term due to higher import costs, the longer-term effect is less predictable. He suggested that elevated tariffs could eventually weigh on US economic growth, which in turn might dampen inflationary pressures over time.

                     

                    Fed’s Goolsbee warns of fear-driven uncertainty as tariff worries grow

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                      ActionForex.com
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                      Chicago Fed President Austan Goolsbee acknowledged in a Fox News interview that while hard data, like the low 4.1% unemployment rate, still point to economic resilience, soft data are painting a gloomier picture.

                      Goolsbee highlighted the noticeable decline in business and consumer sentiment. Goolsbee said that this shift reflects growing uncertainty and fear regarding tariffs.

                      “They don’t want to go back to the kind of inflationary environment that we had in ’21 and ’22. And we’re just going to have to see how this plays out,” he added.

                      Goolsbee emphasized that while imports make up only around 11% of the U.S. economy — potentially limiting the direct inflationary impact of tariffs — there are wider concerns.

                      “The fear is if it jumps out of the 11% lane,” he warned, noting that cascading effects from uncertainty could stall consumer spending or business investment.

                      US ISM manufacturing falls to 49.0, prices surge

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                        ActionForex.com
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                        US ISM Manufacturing PMI fell back into contraction at 49.0 in March, missing expectations of 49.9 and down from February’s 50.3.

                        The decline was led by a sharp drop in new orders, which slumped from 48.6 to 45.2 — their lowest level since May 2023 — and a pullback in production 50.7 to 48.3. Employment also remained under pressure, falling from 47.6 to 44.7, and continuing a trend of contraction seen in 28 of the past 35 months.

                        While overall activity softened, price pressures surged. The Prices Index jumped from 62.4 to 69.4, its highest reading since June 2022. Over the past six months, the index has climbed by more than 21 percentage points, signaling mounting cost pressures that could feed into broader inflation in the months ahead — especially in the context of tariff-related supply chain disruptions.

                        Despite the decline in PMI, ISM noted that the current level still aligns with a modest annualized GDP growth rate of 1.9%.

                        Full ISM manufacturing release here.

                        BoE’s Greene: Trade War likely disinflationary for UK

                          By
                          ActionForex.com
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                          BoE Monetary Policy Committee member Megan Greene said today that a trade war involving retaliatory tariffs would likely be “disinflationary” for the UK overall. Though she cautioned against putting too much weight on early modelling at this stage.

                          Greene pointed out that exchange rates would be a key transmission channel for the effects of global trade tensions. She also noted the possibility that the US dollar’s role as the world’s reserve currency could be “undermined a little bit” by the rising uncertainty, adding more unpredictability to how exchange rates, including GBP/USD, could respond.

                          On domestic inflation expectations, Greene maintained that they “remain anchored” for now but acknowledged the upward drift over the past six months as a growing concern. While she clarified that this is not currently a crisis-level issue—“not flashing red lights”—the trend warrants attention.

                          Eurozone CPI falls to 2.2% in Mar, core down to 2.4%

                            By
                            ActionForex.com
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                            Eurozone headline CPI eased slightly from 2.3% yoy to 2.2% yoy in March, in line with expectations. CPI Core (excluding energy, food, alcohol & tobacco) dropped from 2.6% yoy to 2.4% yoy, undershooting forecasts of 2.5% yoy.

                            Looking at the composition, services remained the main driver despite moderating to 3.4% from 3.7%. Food, alcohol, and tobacco edged up to 2.9% from 2.7%. Non-energy industrial goods stayed stable at 0.6%, while energy slipped further into deflationary territory at -0.7%.

                            Full Eurozone CPI flash release here.

                            UK PMI manufacturing finalized at 44.9, sector hit on several fronts

                              By
                              ActionForex.com
                              -

                              UK PMI Manufacturing index was finalized at 44.9 in March, down from 46.8 in February, its lowest level in 17 months. The data showed broad-based weakness, with steep declines in output, new orders, and export business. Business optimism also tumbled to its lowest point since November 2022.

                              Rob Dobson of S&P Global Market Intelligence noted that new business inflows suffered one of the sharpest drops since the pandemic lockdowns of 2020.

                              Manufacturers are being “hit on several fronts”: weakening domestic demand, rising costs linked to minimum wage and national insurance changes, and a deteriorating global trade backdrop due to mounting geopolitical risks and tariff uncertainties.

                              Full UK PMI manufacturing final release here.

                              Eurozone PMI manufacturing finalized at 48.6, greenshoots clouded by tariff frontloading

                                By
                                ActionForex.com
                                -

                                Eurozone manufacturing showed encouraging signs of recovery in March, with the final PMI Manufacturing reading rising to 48.6, its highest level in 26 months. Output index broke above the 50 mark to 50.5, the first time in growth territory since March 2023. Though still technically in contraction, the steady three-month climb in headline PMI suggests that the worst may be behind for the sector.

                                Regional breakdowns reveal uneven performance, with Greece leading the bloc at 55.0, while Italy and Austria remain below 47. Germany and France—the two largest Eurozone economies—improved notably, to 48.3 (31-month high) and 48.5 (26-month high) respectively.

                                Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, believed some of the recent gains stem from US companies frontloading orders ahead of the looming tariff war, which could mean that part of the improvement may unwind in the coming months.

                                Still, there are signs of structural tailwinds forming. Speculation is growing that Germany’s ramped-up fiscal spending—particularly on defense and infrastructure—may eventually trickle down into broader Eurozone growth. While those benefits are unlikely to be felt until 2026 or beyond, they offer a potential path to sustained recovery.

                                Full Eurozone PMI manufacturing final release here.

                                RBA stands pat, inflation eases as expected, but outlook clouded

                                  By
                                  ActionForex.com
                                  -

                                  RBA kept the cash rate target unchanged at 4.10% today, in line with broad market expectations. While the central bank welcomed the continued decline in underlying inflation, it emphasized a “cautious” stance due “risks on both sides”.

                                  Recent data suggests inflation is easing in line with forecasts, but RBA reiterated that it needs greater confidence that this trend will continue sustainably toward the midpoint of the 2–3% target band.

                                  RBA highlighted “notable uncertainties” around domestic consumption and labor market dynamics. Internationally, there are concerns over the escalating US tariff policy, noting that such developments are already affecting global confidence.

                                  The risk of further tariff expansion or retaliatory measures from other countries could amplify the drag on global activity. Inflation could move in “either direction” depending on how households and firms react to the shifting macroeconomic environment.

                                  Full RBA statement here.

                                  China Caixin manufacturing rises to 51.2, jobs and prices Lag

                                    By
                                    ActionForex.com
                                    -

                                    China’s Caixin PMI Manufacturing rose to 51.2 in March, up from 50.8 and marking a four-month high.

                                    According to Wang Zhe of Caixin Insight Group, the upbeat print points to a steady start to the year, suggesting broader signs of recovery in the industrial sector.

                                    Still, challenges remain beneath the surface. The labor market “remained relatively sluggish”. In addition, “deflationary pressures persisted”, driven by weak domestic demand and cautious sentiment among market participants.

                                    Full China’s Caixin PMI manufacturing release here.

                                    Japan PMI manufacturing finalized at 48.4, weaker domestic and international demand

                                      By
                                      ActionForex.com
                                      -

                                      Japan’s manufacturing sector contracted further in March, with final PMI reading falling to 48.4 from February’s 49.0, marking the lowest level in a year.

                                      According to S&P Global, both output and new orders declined more sharply, reflecting “weaker demand from both domestic and international clients”. Employment offered a rare bright spot, as firms increased hiring at the fastest rate in three months.

                                      However, confidence remained muted and below the long-run average. Cost pressures also persisted, with strong increases in both input costs and selling prices, suggesting that “inflationary pressure across the sector remains acute”.

                                      Full Japan’s PMI manufacturing final release here.

                                      Japan’s Tankan survey flags manufacturing caution, services hit 33-year high

                                        By
                                        ActionForex.com
                                        -

                                        Japan’s Q1 Tankan survey revealed a mixed outlook for the economy, with sentiment among large manufacturers slipping for the first time in a year. The index fell from 14 to 12, in line with expectations, as steel and machinery producers grew more cautious amid weak global demand, rising input costs, and uncertainty surrounding US tariff policy.

                                        However, manufacturing outlook ticked down just slightly to 12, beating expectations of a sharper decline to 9, indicating that businesses remain cautiously optimistic.

                                        In contrast, Japan’s services sector showed remarkable resilience. The large non-manufacturing index rose from 33 to 35—marking the highest level since 1991. Still, the outlook component was flat at 28, slightly missing forecasts of 29.

                                        Capital expenditure plans were also encouraging, with large firms expecting a 3.1% increase for fiscal 2025, ahead of consensus of 2.9%.

                                        Fed’s Barkin: Tariffs create dual risks for inflation and jobs

                                          By
                                          ActionForex.com
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                                          Richmond Fed President Thomas Barkin highlighted growing concerns over the economic impact of the Trump administration’s upcoming tariffs. He told CNBC that the tariffs could both stoke inflation and weigh on the labor market.

                                          “Call me nervous on both,” Barkin said, signaling that the path forward for monetary policy remains highly data-dependent.

                                          Barkin emphasized “there’s a lot of uncertainty right now, and I think that makes the case for wait and see how this plays out.”

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