Welcome to the Weekly Market Roundup—your one-stop source for the latest in global market trends, central bank developments, and economic indicators. In the final week of March, global markets were shaken by a fresh wave of concerns over trade policy, inflation dynamics, and economic slowdown. U.S. stocks slid further into correction territory, Europe faced uncertainty over rate cuts, Japan saw a boost from wage growth, and China found relief in stimulus hopes despite deepening deflation.

Here's your detailed breakdown of last week's top financial stories and market movements.

Global Markets: Volatility Returns Amid Policy and Recession Jitters

Markets were rocked by a trio of concerns—trade policy uncertainty, inflation dynamics, and looming recession fears. The U.S. extended its market downturn to a fourth straight week, while European equities faltered and Japan posted modest gains. China’s markets, meanwhile, rose on hopes of new government stimulus, despite worrying economic data.

U.S. Markets: Inflation Cools, but Tariffs and Recession Fears Dominate

U.S. equities posted their fourth consecutive week of losses, with the S&P 500 entering correction territory. The Nasdaq sank more than 8%, while small-cap stocks represented by the Russell 2000 are now down over 8% year-to-date.

Trade Tensions Escalate

The Trump administration introduced new tariffs, sparking fears of renewed trade wars and supply chain disruptions. These policy shifts triggered a risk-off sentiment across financial markets.

Inflation and Consumer Sentiment

On a more positive note, February’s CPI showed a lower-than-expected core inflation rate of 3.1% year-over-year. The Producer Price Index also surprised to the downside. However, underlying inflationary pressures remain in certain sectors.

Meanwhile, the University of Michigan’s Consumer Sentiment Index dropped sharply by 11%—its lowest level since 2022—highlighting rising concerns over job security, inflation, and market volatility.

European Markets: Rate Cut Uncertainty and Fiscal Challenges

European equities remained under pressure, caught between persistent inflation and indecision within the European Central Bank.

ECB Policy Division

While some ECB policymakers are advocating for patience, citing stubborn inflation, others push for an April rate cut. Christine Lagarde underscored the “exceptionally high uncertainty” facing the eurozone.

Germany and the UK

Germany’s new €500 billion infrastructure plan provided some optimism, aiming to revive economic momentum. However, the UK reported a 0.1% contraction in January GDP, reinforcing fears that prolonged high interest rates are curbing growth.

Japan: Modest Gains Backed by Record Wage Growth

Japan’s markets inched higher, supported by foreign demand and a continued slide in the yen.

Wage Negotiations and Policy Outlook

Japan's “shunto” wage negotiations delivered the largest pay increases in over three decades, strengthening the case for a potential BoJ rate hike later this year. The yen weakened to 148.7 per U.S. dollar, benefitting exporters but raising imported inflation concerns.

BoJ Commentary

BoJ Governor Kazuo Ueda remarked that the rise in bond yields is part of a natural market shift, downplaying the need for immediate intervention unless extreme volatility arises.

China: Stimulus Optimism Drives Rebound

Chinese equity markets rebounded on optimism over forthcoming stimulus, even as economic indicators revealed growing deflationary pressure.

Government Stimulus and Economic Data

Beijing hinted at fresh pro-consumption policies through a scheduled press conference involving finance and commerce officials. Despite this, deflation worries deepened. February’s CPI fell 0.7% YoY, and core inflation turned negative for the first time in 15 years.

The property sector remains weak, weighing heavily on consumer confidence.

Key Events to Watch This Week

United States

• Retail sales figures from the Commerce Department

• Empire State Manufacturing Index

• Housing Starts & Building Permits

• FOMC rate decision and economic projections

• Philly Fed Manufacturing Index

• Existing Home Sales data

Eurozone & UK

• Final inflation readings for March

• Bank of England rate decision

• Swiss National Bank monetary policy announcement

Japan

• BoJ policy meeting (March 19)

• Capital expenditure survey (March 20)

• National inflation data (March 20)

China

• Economic activity data for January–February (March 17)

• Fixed asset investment and retail sales

• Urban unemployment rate

• Loan Prime Rate (LPR) updates (March 20)

Conclusion

Markets closed the final week of March with heightened uncertainty. From inflation easing in the U.S. to central bank hesitation in Europe, and from Japan’s wage-driven momentum to China’s deflationary backdrop, global investors are navigating a complex, high-stakes environment.

Staying informed on key policy moves and macro data is crucial in this climate. We’ll be here each week to help you interpret the noise and uncover the signals.

FAQs

1. What triggered the recent U.S. market sell-off? Rising recession fears and new tariffs reignited risk aversion, while weakening consumer sentiment added to the pressure.

2. Is inflation still a concern for central banks? Yes, although U.S. inflation is cooling, some underlying price pressures persist. Europe remains divided over the timing of rate cuts due to sticky inflation.

3. What’s driving Japan’s economic resilience? Record wage growth, supportive policy, and yen weakness are all fueling Japan’s moderate gains.

4. How is China managing deflation concerns? The Chinese government is signaling more stimulus, especially in consumption, though core economic weaknesses remain unresolved.

5. What key events should investors watch this week? Major central bank decisions, inflation data, and retail sales figures will shape sentiment across all regions.

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