Market Outlook for the Week: Key Global Economic and Market Updates

Global Stock Market Highlights

Last Friday, major stock indexes ended higher on Friday as investors responded positively to Fed Chair Jerome Powell's remarks on the U.S. economy. Fed Chair Jerome Powell described the job market as "solid" and expressed an overall optimistic outlook on the economy. The February jobs report revealed that U.S. employers added 151,000 jobs, slightly missing forecasts, while the unemployment rate inched up to 4.1%.

• Nasdaq Composite Index closed at 18,196.22, gaining 0.70% on the day but declining 3.45% for the week.
• NYSE Composite Index closed at 19,573.06, up 0.34% on the day but down 2.27% for the week.
• S&P 500 Index closed at 5,770.20, increasing 0.55% on the day but dropping 3.10% for the week
• Dow Jones Industrial Average EW closed at 13,365.73, rising 0.69% on the day while falling 2.10% for the week.

European stocks ended the day lower on Friday as investors dealt with the back-and-forth changes in U.S. trade policy throughout the week and reacted to a U.S. jobs report that was a bit weaker than expected.

• Stoxx Europe 600 Index closed at 553.35, declining 0.46% on the day and 0.69% for the week.
• DAX Performance Index closed at 23,008.94, down 1.75% on the day but gaining 2.03% for the week.
• CAC 40 Index closed at 8,120.80, losing 0.94% on the day but edging up 0.11% for the week.

Asia-Pacific stock markets showed mixed results, with global economic worries and trade policy uncertainties weighing on investor sentiment. Japan's Nikkei 225 took the biggest hit, falling 2.2% to a six-month low, largely due to changes in U.S. tariff policies.

• Nikkei 225 Index closed at 36,887.17, dropping 2.17% on the day and 0.72% for the week.
• Hang Seng Index closed at 24,231.30, slipping 0.57% on the day but surging 5.62% for the week.
• Shanghai Composite Index closed at 3,372.55, down 0.25% on the day but gaining 1.56% for the week.
• Australia S&P/ASX 200 Index closed at 7,948.20, falling 1.81% on the day and 2.74% for the week.

• The Dollar Index (DXY), a closely watched gauge of the U.S. dollar’s performance against other major currencies, closed at 103.91, declining 0.29% on the day and 3.40% for the week.
• The Brent crude oil, the global oil price benchmark, settled at $70.36, rising 1.30% on the day but falling 3.36% over the week.
• The Gold ended at $2,911.61, ticking up 0.04% on the day and gaining 1.91% for the week.
• The 2-year U.S. Treasury yield particularly responsive to Federal Reserve policy rates, stood at 4.00 bps, increasing 3.10 bps on the day but slipping 0.50 bps over the week.
• The 10-year U.S. Treasury yield an indicator of long-term borrowing costs, closed at 4.30 bps, climbing 2.50 bps on the day and rising 8.10 bps for the week.

Upcoming U.S. Economic Indicators to Watch This Week

This week in the US, inflation data will be in focus as markets assess whether tariffs are already pushing costs higher.

In the U.S., key data points closely watched for the Fed’s monetary policy decisions include February consumer price index (CPI) data on Wednesday and February producer price index (PPI) data on Thursday.

Headline CPI is expected to slow from 0.5% to 0.3% month-over-month in February, with the annual rate easing from 3.0% to 2.9%. Similarly, core CPI is projected to decelerate from 0.4% to 0.3% month-over-month, with the yearly rate slightly declining from 3.3% to 3.2%.

For PPI, the headline figure is anticipated to slow from 0.4% to 0.3% month-over-month, bringing the annual increase down from 3.5% to 3.2%. Meanwhile, core PPI is expected to rise 0.3% month-over-month, maintaining the previous pace, while the annual rate is forecasted to edge down from 3.6% to 3.5%.

Investors will also keep an eye on the JOLTS job openings report, preliminary Michigan consumer sentiment index, consumer inflation expectations, NFIB Business Optimism Index, and the Monthly Budget Statement.

December JOLTS job openings fell from 8.16 million to 7.60 million, marking a sharper-than-expected drop to a three-month low. This signaled a slight cooling in labor demand and a gradual easing in the job market.

Alongside the JOLTS data, weekly jobless claims, a key high-frequency labor indicator will be closely tracked. The latest report showed claims dropping from 242,000 (a two-month high) to 221,000, indicating a slight tightening in labor market conditions.

Elsewhere in the Americas, The Bank of Canada is likely to cut interest rates by 25 basis points in response to weaker-than-expected jobs data and the impact of US tariffs.

Key economic reports from the region include inflation, producer prices, industrial production, and retail sales data from Brazil, and industrial production data from Mexico.

Mexico’s industrial production data for January will be released on Thursday.

In December, Mexico's industrial production declined by 1.4% month-over-month, marking the fifth consecutive month of downturn. Year-on-year, industrial output shrank by 2.7%, driven by significant drops in construction (-7.5%), mining (-6.3%), and manufacturing (-0.6%).

The monthly drop exceeded expectations, highlighting ongoing challenges in industrial activity. Despite this, Mexico's industrial production showed a modest 0.2% increase for the year, reflecting a year of mixed performance.

For January 2025, Mexico's industrial production is expected to increase by 0.3% month-over-month and rise by 0.1% year-over-year. The expectations reflect a modest rebound after the decline seen in the previous month, signalling potential stabilization in industrial activity.

European Economic Trends: This Week's Macro Insights

Industrial production in the Eurozone is expected to have rebounded 0.8% in January, recovering from a 1.1% decline in December.

Germany’s industrial production rose 2% month-over-month in January 2025, rebounding from a 1.5% decline in December 2024 and surpassing market forecasts of a 1.5% increase.

German exports fell by 2.5% in January compared to the previous month. This result contrasts with a forecasted 0.5% increase. Imports rose by 1.2% in January compared to the previous month.

Germany’s final inflation data, and wholesale prices will also be released later this week.

The UK is set for a packed week of economic updates, with GDP growth expected at just 0.1% in January, slowing down from 0.4% in December 2024. Additionally, both manufacturing and industrial production are projected to have contracted on an annual basis.

Asian Economic Data: This Week's Outlook

This week in China, investors will closely monitor the Two Sessions conferences for details on how the government plans to finance its wider budget deficit, regulate commodity production, and respond to US tariffs.

Economic data highlighted deflation in both consumer and producer prices, while new yuan loans are expected to have been contracted on an annual basis.

Japan is on track to record its first current account deficit in two years, with household spending likely contracting.

On Tuesday, the final GDP growth data for Japan's fourth quarter of last year will be released. According to preliminary data, Japan's economy showed a stronger-than-expected recovery in the last quarter of the previous year, growing by 0.7% on a quarterly basis and 2.8% on an annualized basis, largely due to the positive impact of investments and net exports.

In India, headline inflation is expected to ease toward the RBI’s 4% target mid-point, while industrial production is forecasted to have accelerated.

South Korea, Singapore, and Malaysia will release their unemployment rates.

In Australia, attention will be on leading economic indicators, including the Westpac Consumer Confidence Index and the NAB Business Confidence Index.

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by ?zge Gürses I EquityRT Macro Research