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March\u2019s S&P Global PMIs (Purchasing Managers\u2019 Indexes) landed at the beginning of last week and took centre stage. The eurozone\u2019s services PMI slowed to 50.4, down from 50.6 in February, while manufacturing activity remained in contractionary territory, albeit rising to 48.7 from 47.6. UK PMIs showed the service sector expanded to 53.2 from 51.0, offsetting a sizeable decline in manufacturing activity \u2013 dropping to 44.6 from 46.9. In the US, despite the manufacturing PMI dipping into contractionary terrain (49.8 versus 52.7), the services PMI data surged to 54.3 from 51.0.<\/p>\n
Australian and UK CPI inflation data (Consumer Price Index) also captured some of the macro spotlight last week, with headline year-on-year (YY) CPI inflation decelerating for both Australia and the UK in February, easing to 2.4% (down from 2.5% in January) and 2.8% (down from 3.0%), respectively. The Reserve Bank of Australia\u2019s (RBA) preferred inflation measure \u2013 the \u2018trimmed mean\u2019 \u2013 also cooled to 2.7% YY from 2.8%, while YY UK core CPI inflation eased to 3.5% from 3.7%.<\/p>\n
UK Chancellor Rachel Reeves delivered her widely anticipated Spring Statement to Parliament. However, amid all the noise and political banter, the Statement was mainly in line with what most had anticipated, and the markets did little to write home about.<\/p>\n
The tail end of last week witnessed US GDP growth (Gross Domestic Product) come in a touch higher; bolstered by consumer spending, real GDP reported an annualised rate of 2.4% for Q4 24 (final estimate). Whether the US can maintain this growth rate given fears of trade concerns and policy uncertainty is now the question. Interestingly, according to the US Federal Reserve (Fed) of Atlanta nowcast model, 2025 is poised for a gloomy start, with the latest estimate indicating a 1.8% contraction in Q1 25. That said, the\u00a0alternative model forecast, adjusted for imports and exports of gold, is\u00a00.2%.<\/p>\n
US PCE (Personal Consumption Expenditures) data for February was also released on Friday, which, as I am sure you are aware, is what the Fed uses to track inflation. Headline month-on-month (MM) and YY prints aligned with estimates and matched January\u2019s data at 0.3% and 2.5%, respectively. Core PCE data, however, rose by 0.4% MM (from 0.3%) and 2.8% YY (from 2.6%). This indicates persistent inflation \u2013 data likely to see the Fed hold steady and wait on the sidelines for now. Markets expect a no-change Fed decision in May, though June\u2019s meeting remains possible for a 25 basis point cut (-20 bps).<\/p>\n