The key events for the w/c 16 March 2026: Central Bank meetings: RBA, BoC, FOMC, BoJ, SNB, BoE, and ECB; US PPI; Aus Labour market; Canada CPI
Macro Recap: The Threat of a Persistent Conflict
Geopolitical Risks
The conflict in the Middle East and the resulting closure of the Strait of Hormuz remain the primary drivers of sentiment. The drift back up in oil prices through the end of last week suggests “conflict duration risk” remains a primary concern. If the conflict becomes more entrenched (and the Strait remains closed), the structural threat to global energy distribution and production may become harder for markets to “look through.” The current uncertainty over the duration of this conflict presents a difficult trade-off for key central bank meetings this week: the longer the conflict lasts, the greater the risk that elevated energy prices un-anchor inflation expectations, squeeze real incomes, and weigh on global growth.
U.S. Macro: A Slower Starting Block
Last week, the US GDP revision for Q4 suggested that growth in 2025 ended on a softer-than-expected note. However, growth was expected to slow in Q4 (despite the much higher tracking of growth ahead of official results), due to the effects of the US government shutdown. The “second estimate” of US GDP growth in Q4 was revised notably lower from 1.4% to 0.7% annualized. While most areas of expenditure contributed to the growth downgrade in Q4, the largest contributions were from personal spending and net exports. Overall in Q4, the largest contributors to the slowdown in growth in Q4 versus Q3 were from slower personal consumption expenditure growth, a contraction in net exports, and the decline in government expenditure.
US Q1 Momentum and the Consumer
Looking ahead, the Atlanta Fed’s GDP Nowcast for Q1 2026 growth remains at a resilient +2.7%. However, momentum cooled following last week’s data releases. While a negative Feb labor report weighed on personal spending estimates, this was partially offset by constructive data in housing starts and existing home sales. Personal income growth strengthened in Jan, but growth in real spending remained low. This suggests that softer personal consumption growth has so far persisted into the current quarter, just as higher energy prices threaten a further squeeze on real incomes.
The Inflation Baseline
Importantly for the outlook, the Fed’s preferred PCE inflation data provided a mixed baseline. Headline inflation edged lower to +2.8% over the year, but core PCE ticked up to 3.1% in Jan. Both headline and core PCE inflation are higher than a year ago – reflecting a stickier inflation profile leading into a period of potentially higher energy prices. While the firming trend in core goods and core services inflation remains a concern, the median and the trimmed mean, to a lesser extent, suggest that underlying price pressures likely did not broaden out this month. The more current CPI report for Feb came in as expected, remaining lower at +2.4% for headline and +2.5% for core, and the upcoming PPI for Feb this week will help gauge the read-through to the Feb PCE result.
Outlook for the week ahead: Central Bank meetings: RBA, BoC, FOMC, BoJ, SNB, BoE, and ECB; US PPI; Aus Labour market; Canada CPI
The week ahead is defined by an unusual calendar alignment among central bank meetings, with at least seven key institutions scheduled to meet. These banks are facing elevated uncertainty over the duration of the current conflict and its subsequent impact on energy prices and inflation. Consequently, policymakers will need to reconcile these global pressures with their respective domestic policy nuances as they navigate yet another shock in this cycle of elevated uncertainty.
There will also be several key data releases, and markets are likely to remain firmly focused on the conflict and energy markets. Headline risks remain elevated in both directions.
Key factors & events to watch this week:
Central Bank Meetings
Most central banks are expected to stay on hold in a “wait-and-see” approach for now, due to uncertainty over the duration and scope of the conflict and its resulting impact on energy prices and inflation. Many markets were expecting policy easing through the remainder of the year; however, policymakers will be cognizant of the shift in market pricing for the path of ST rates – in some cases, shifting toward the prospect of hikes this year, as the risk of a prolonged conflict could see higher energy prices derail inflation progress. For most central banks, it will be too early to tell. However, signalling their commitment to inflation mandates may be an important part of central bank decisions this week to keep inflation expectations anchored amid the uncertainty. We will continue to track the signalling by central banks on the outlook and for shifts in guidance.
RBA
- Not all central banks are expected to stay on hold. The RBA will be first cab off the rank this week, and markets are expecting the chance of another hike (back-to-back), taking the cash rate from 3.85% to 4.1%.
- Inflation was (already) the immediate policy risk at its meeting in Feb leading the RBA to hike rates by 25bps.
- Guidance had been suspended at the last meeting in Feb due to the uncertainty over the persistence of domestic inflation pressures.
BoC
- The BoC is expected to stay on hold. The Bank is expected to remain cautious over inflation pressures as the economy adjusts through this period of ‘structural change’.
- Similarly, given the uncertainty facing the Canadian economy over the impacts from tariffs and especially the upcoming renegotiation of the USMCA, guidance had been suspended at the last meeting to provide the Bank with maximum optionality.
FOMC
- The FOMC is expected to stay on hold at this meeting. Market pricing for the path of rates has shifted notably in the last two weeks, now pricing in one cut through the next year.
- The FOMC faces a challenge over balancing its dual mandate – with PCE inflation remaining stickier, and concerns over the labor market rising after the Feb labor report.
- Fed communication will be in focus.
- Updated projections (SEP) will be released at this meeting, and the path of rates and the shift in the projections for growth, inflation, and unemployment will be important signalling.
- Changes to dissents will show how aligned members are – there were two last time.
- The press conference will enable Chair Powell to expand on how they are thinking about this latest shock, and he’ll have to walk a fine line about ‘looking through’ another inflation shock.
BoJ
- The BoJ is expected to stay on hold at this meeting.
- Bank communication will be important for the outlook for hikes – prior guidance was signalling an expectation for further hikes, and markets are still (potentially) expecting a hike in Apr.
BoE
- The BoE is now also expected to stay on hold, shifting from an expectation for a cut at this meeting.
- Recent data continues to reflect easing in growth and labour market conditions, while inflation, although still elevated, has continued to ease. At the last meeting, the BoE noted that “the risk of greater inflation persistence is now less pronounced”. At the same time, concerns emerged over slower inflation risks from weakening demand and a looser labour market.
- The decision to stay on hold, and any changes to the inflation outlook, will need to be reconciled with the prior guidance that “Bank Rate is likely to be reduced further”.
ECB
- The ECB is also expected to stay on hold at this meeting.
- Guidance is unlikely to be changed from the current ‘meeting by meeting’ approach – although the timeframe for the outlook is likely to be shortened, given the elevated uncertainty over energy prices, especially for Europe.
Geopolitical Risks
Geopolitical risks are expected to remain elevated as markets grapple with the uncertain trajectory and scope of the conflict.
Global Data
- US: headline PPI for Feb is expected to slow to +0.3% over the month in Feb (from +0.5% in Jan), and increase to +3% over the year (from +2.8% in Jan). Core PPI is expected to slow to +0.3% over the month in Feb (from +0.8% in Jan), but also accelerate to +3.7% in Feb (from +3.6% in Jan).
- Canada: CPI for Feb is expected to firm over the month for headline inflation (+0.7% in Feb from 0% in Jan) and remain little changed at around +2.3% over the year. The median inflation rate is expected to continue easing to +2.4% in Feb from +2.5% in Jan.
- Australia: Labour Market Survey for Feb is expected to remain fairly stable with +20k employment growth in Feb (up from +17k in Jan) while the unemployment rate ticks slightly higher to 4.2% (from 4.1% in Jan).
This week, the US Treasury will auction and settle approx $679bn in ST Bills, Notes, and Bonds, raising approx. $96bn in new money. Approx $26bn in ST Bills will mature on the Fed balance sheet and will be reinvested. The US Treasury will also auction the 10-year TIPS and 20-year Bond this week – both to settle at the end of the month.
More detail (including a calendar of key data releases) is provided in the briefing document – download the pdf below:
Comments and feedback are welcome. Please email me at kim.mofardin@marscapitalpartners.net
