Amid a holiday-shortened week in Europe, traders will be looking ahead to the latest flash PMI surveys from the Eurozone to get a sense of how business confidence has fared in the wake of the Russian invasion of Ukraine. Meanwhile Tesla and Netflix earnings reports are among the highlights from Wall Street as the Q1 reporting season continues. 

Eurozone data 

A big focus for the market will the latest Eurozone purchasing managers indices (PMIs). EU consumer confidence tumbled due to the war in Ukraine, with inflation the big kitchen table worry. The last round of flash PMIs released on March 23rd pointed to surging input cost inflation and this being passed onto consumers. The German private sector saw the steepest rise in overall input costs on record for the series (since Jan 1998). Incidentally, the PMIs show activity was holding up pretty well, in part it seems because for now companies can pass the costs on, and demand is not a problem.  

However, the business confidence reading from the French PMI fell to its lowest since January 2021. In Germany, businesses’ expectations worsened considerably, falling to their lowest since June 2020. German manufacturer confidence turned negative, suggesting more firms expect a fall in output in the year ahead, for the first time since May 2020. Confidence has been shaken by the war in Ukraine, a natural reaction, but also very much by the subsequent expected rise in inflation, which was already high, and supply disruption, which was already bad. 

Earnings Season 

Major economic data