As we head into this volatile week, the economic calendar is being viewed through a “dual-lens”: the cold, hard data from February (pre-war) versus the reality of $110+ oil prices and the de facto closure of the Strait of Hormuz.
High-Stake Events
1. US CPI: The “Lagging” Reality vs. Future Fear
Current Fed Expectations: For the March 18 meeting, a “Hold” is indeed a done deal. However, the June rate cut—once a high-probability event—is now a coin toss (market pricing has shifted from a 60bp cut expectation for 2026 down to 40bp since the conflict began).
Wednesday’s CPI covers February, a period before the recent energy spike. If this “clean” data shows that core inflation was already sticky (anything above 0.2% mom), it confirms that inflation was not fully tamed even under “normal” conditions.
A hot February CPI combined with current 110 oil creates a “no-cut zone” for the Fed. It suggests that once the March/April energy spike hits the data, inflation will rebound sharply. This would likely push the next rate cut further out to September or December 2026.
2. Canada Jobs: The “Oil vs. Interest Rate” Tug-of-War
The BoC is in a precarious “wait-and-see” mode. While the economy is soft, the oil spike acts as a complex double-edged sword.
As a net exporter, higher oil is a “Terms of Trade” win. It boosts national income, energy sector profits, and CAD demand. At the same time, higher gasoline prices act as a regressive tax on Canadian households, who are already struggling with record debt and mortgage renewals.
If Friday’s report shows a strong labor market (low unemployment, high wage growth), it gives the BoC the “green light” to remain on a prolonged hold or even consider a “hawkish pause.” If jobs are weak, the BoC faces a “stagflation” nightmare: slowing growth but rising energy-driven inflation.
Silent Movers
1. UK GDP: The BoE’s Narrowing Path
Before the Middle East conflict, a March cut was widely debated. However, with the UK being highly sensitive to energy imports, the “inflationary floor” has risen. Friday’s monthly GDP data (for January) will show if the UK entered 2026 with any momentum.
If GDP is weak, it increases the pressure on the BoE to cut to prevent a recession. If GDP is resilient, the BoE hawks could “global uncertainty” and energy shock as an excuse to push for a hold in March, delaying the cut to May or June to ensure inflation doesn’t roar back.
2. Australia Sentiment: The RBA’s “Live” March Meeting
The RBA is the outlier among major central banks. They hiked in February (to 4.35%) and have signaled they are “not ruling anything out.”
If sentiment has “cratered” following the February move, the RBA would maintain a “Hawkish Hold,” waiting for the full quarterly CPI data in April before acting again in May.
However, if Tuesday’s sentiment data shows businesses are still passing on costs and consumers are still spending despite the February hike, the RBA may feel forced to pull the May hike forward to March. They want to “break the back” of inflation before energy prices push it higher.
Here are some highlights for the week:
United States
- Monday: Consumer Inflation Expectations (Feb).
- Wednesday: Consumer Price Index (Feb).
- Friday: Core PCE Price Index (Jan); GDP (Q4, 2nd Est.); University of Michigan Consumer Sentiment (Mar, Prelim).
Canada
- Friday: Labour Force Survey (Feb) .
Eurozone
- Monday: Sentix Investor Confidence (Mar).
- Friday: Eurozone Industrial Production (Jan).
United Kingdom
- Friday: Monthly GDP (Jan); Industrial and Manufacturing Output (Jan); Trade Balance.
Japan
- Tuesday: Household Spending (Jan).
- Wednesday: Producer Price Index(Feb).
Australia
- Tuesday: Westpac Consumer Confidence (Mar); NAB Business Confidence (Feb).
New Zealand
- Wednesday: Manufacturing Sales (Q4).
- Thursday: Business NZ PMI (Feb).
China
- Monday: Consumer Price Index & Producer Price Index (Feb).
- Tuesday: Balance of Trade (Jan–Feb combined).
