Week ahead: UK Budget, US inflation, ECB rate hike ahead

The Budget is the main set piece for the UK market, with chancellor Jeremy Hunt expected to keep spending tight and taxes high. The European Central Bank is expected to raise rates by 50bps as it tackles inflationary pressures. And all eyes will be on the latest clutch of US inflation data after Fed chair Jay Powell’s hawkish remarks last week. The Fed is in blackout ahead of the March 21-22 meeting.

Here are the week’s key events:

Monday

Watch out for the daylight savings time shift in the US which comes a couple of weeks ahead of Europe. That will mean US markets opening and closing an hour earlier than usual for the next fortnight. German wholesale inflation and Eurogroup finance ministerial meetings are on the slate.

Earnings: Direct Line (DLG),

Tuesday

Key US inflation data will be closely scrutinised, with core CPI in particular focus. Core CPI, which excludes food and energy, increased 0.4% monthly and 5.6% from a year ago, against estimates of 0.3% and 5.5%. This was the latest data point that pushed the Fed towards taking a more hawkish stance once more. This is the latest major inflation print ahead of the Fed’s meeting on March 21^st. UK employment data will also be one to watch.

Earnings: Close Brothers (CBG)

Wednesday

It’s Budget Day in the UK. Things might a little less glum than many had feared as the economy is proving a bit more resilient and energy prices have come down, but don’t expect many fireworks or giveaways from the chancellor. Meanwhile there is more US data with producer price inflation, retail sales and the Empire State manufacturing index. New Zealand GDP is due later in the evening (European time, Thursday March 16^th for APAC).

Earnings: Adobe (ADBE), Prudential (PRU)

Thursday

The European Central Bank is all but certain to raise rates by another 50bps – the question will be what’s next. Will new staff projections signal much lower inflation in 2024 and 2025? If so, the ECB might be keen to ease off the pedal and slow down to 25bps hikes in May and June before pausing. Australian employment data is among the main early releasees ahead of the US Philly Fed manufacturing index and weekly employment claims.

Earnings: FedEx (FDX), Deliveroo (ROO)

Friday

The week rounds out with final CPI inflation figures from the Eurozone and the latest University of Michigan consumer sentiment and inflation expectations data. In February, the UoM said year-ahead inflation expectations rebounded to 4.1%, from 3.9% in January and 4.4% in December. 

Earnings: XPeng (XPEV)