The Big Three
Economic Dashboard
| Indicator | Actual | Expected | Prior | Verdict |
|---|---|---|---|---|
| RBA Cash Rate (Mar) | 4.10% | 4.10% | 3.85% | ▼ Hawkish |
| NY Empire State Mfg (Mar) | -0.2 | 4.0 | 7.1 | ▼ Miss |
| Canada CPI YoY (Feb) | 1.8% | — | 2.3% | ▲ Beat |
| Canada Core CPI YoY (Feb) | 2.3% | — | 2.6% | ▲ Beat |
| Canada Trimmed CPI YoY (Feb) | 2.3% | 2.4% | 2.4% | ▲ Beat |
| US Industrial Production MoM (Feb) | 0.2% | 0.1% | 0.7% | ▲ Beat |
| US NAHB Housing Index (Mar) | 38 | 37 | 37 | ● In Line |
| India WPI Inflation YoY (Feb) | 2.13% | 2.00% | 1.81% | ▼ Miss |
| Brazil IBC-Br Activity (Jan) | 0.80% | 0.85% | -0.20% | ● In Line |
| Canada Housing Starts (Feb) | 250.9K | 243.0K | 240.1K | ▲ Beat |
| Colombia IP YoY (Jan) | -0.5% | 0.2% | -0.6% | ▼ Miss |
| Colombia Retail Sales YoY (Jan) | 7.8% | 10.1% | 11.0% | ▼ Miss |
| India Trade Balance (Feb) | -$27.1B | -$28.0B | -$34.7B | ▲ Beat |
| Argentina Budget Balance (Feb) | 1,411M | — | 3,126M | ● In Line |
Europe
Relief Rally as Oil Pulls Back From Peaks
European equities rallied on Monday as oil prices retreated from Friday’s $103 Brent close. The DAX gained 0.68% to 23,608, the CAC 40 added 0.30% to 7,935, and the Euro Stoxx 50 rose 0.54% to 5,747. The FTSE 100 climbed 0.65% to 10,328, supported by easing energy costs that took some pressure off the inflation outlook ahead of this week’s Bank of England meeting.
The German Bundesbank published its monthly report amid quiet data calendars, while German 12-month Bubill yields rose to 2.27% from 1.985% at the prior auction — reflecting the repricing of rate expectations across the continent. French short-term bill yields also edged higher, with the 12-month BTF settling at 2.353%.
The oil retreat was driven by Treasury Secretary Bessent’s confirmation that the US is allowing Iranian tankers to pass through the Strait of Hormuz, plus reports that a multinational convoy escort system is being organized. However, analysts cautioned the relief may be temporary given the Strait remains a contested waterway and Iran’s new supreme leader has vowed continued resistance.
The ECB, Bank of England, and Bank of Japan all meet this week alongside the Fed. None of the “G4” central banks are expected to hike, but hawkish statements are anticipated as energy-driven inflation expectations have shifted dramatically since late February. The contrast with the RBA — which did hike — underscores how Australia’s domestic inflation problem is more acute than its peers.
Verdict
Cautiously positive. The oil pullback gave European markets breathing room, but four central bank meetings this week mean volatility is far from over. The energy risk premium has not been structurally unwound.
United States
Equities Surge as Oil Retreats, but Empire State Warns
Wall Street staged its best session in three weeks. The S&P 500 climbed 1.01% to 6,699, the Dow added 388 points to 46,946, and the Nasdaq gained 1.22% to 22,374. The VIX plunged over 13% to around 23.7 as oil pulled back from last week’s $100+ levels after Bessent confirmed Iranian oil exports are flowing through the Strait. Nvidia rose ahead of its GTC conference keynote, and Meta jumped over 2% on layoff reports.
The NY Empire State manufacturing index, however, sounded a warning. The headline plunged to -0.2 from 7.1, well below the 4.0 consensus and marking the first contraction this year. Shipments fell sharply to -6.9 from -1.0, and delivery times nearly tripled to 13.7 from 4.0. The bright spot: capital spending plans surged to a multi-year high of 21.6, and new orders edged up to 6.4. Input price pressures also eased notably, with prices paid falling 13 points.
Industrial production rose 0.2% month-on-month in February, slightly above the 0.1% consensus, while manufacturing output also gained 0.2%. Capacity utilization held at 76.3%. The NAHB housing market index ticked up to 38 from 37, a marginal improvement suggesting builder confidence is stabilizing but remains well below the 50 threshold that signals positive sentiment.
The 10-year Treasury yield eased roughly 6 basis points to 4.22% on the oil pullback, while the DXY slipped to around 99.6 as safe-haven flows unwound. WTI crude fell nearly 4% to $93.20 and Brent dropped about 2% to $101.20. All eyes now turn to Wednesday’s Fed decision — following last Friday’s GDP shocker covered in our March 14 briefing — where rates are universally expected to hold but the updated dot plot and Powell’s tone on energy-driven inflation will dominate the narrative.
Verdict
A relief rally, not a trend reversal. The equity bounce was almost entirely oil-driven, and the Empire State contraction plus this week’s Fed meeting argue against chasing the move. Production data was decent but backward-looking.
Asia-Pacific
RBA Goes Against the Grain With Back-to-Back Hike
The Reserve Bank of Australia raised its cash rate 25 basis points to 4.10% in a split 5-4 decision, making it the only major central bank hiking this week while the Fed, ECB, BoE, and BoJ are all expected to hold. Governor Bullock was blunt, warning that recession may be a necessary cost of defeating inflation that has risen “materially” in the second half of 2025 and now faces additional upward pressure from surging fuel costs.
Australia’s January CPI printed 3.8% — well above the RBA’s 2-3% target — and the labor market remains tight with unemployment at 4.1%. With petrol prices surging from $1.71 to above $2.20, analysts estimate the oil shock alone could add a full percentage point to headline inflation, potentially pushing it toward 5%. All Big Four banks expect a third consecutive hike in May that would take the cash rate back to 4.35%, effectively unwinding all three 2025 rate cuts.
India’s wholesale price inflation accelerated to 2.13% from 1.81%, above the 2.0% forecast, driven by food prices jumping to 2.19% from 1.55%. However, India’s trade deficit narrowed sharply to $27.1 billion from $34.7 billion as imports fell to $63.7 billion. South Korea’s export price index surged 10.7% year-on-year, reflecting the energy and exchange rate pass-through into Asian trade flows.
The Nikkei 225 dipped 0.1% to 53,751 while the Hang Seng rallied 1.45% to 25,834, outperforming on the oil retreat. Shanghai’s SSE Composite slipped 0.3%. Gold edged lower to around $5,025 as the dollar weakened modestly and risk appetite returned. Bitcoin topped $73,000 for the first time in weeks on safe-haven and AI-driven sentiment.
Verdict
The RBA is the canary in the coal mine. If oil stays elevated, other central banks will face the same inflation dilemma Australia just addressed. The split vote reveals the tension between growth risks and price stability that will define 2026 monetary policy globally.
Latin America & Africa
Canada Disinflation, Colombia Fading, Brazil Steady
Canada delivered the standout data point for the Americas. Headline CPI plunged to 1.8% year-on-year from 2.3%, now firmly below the BoC’s 2% target. Core CPI fell to 2.3% from 2.6%, the common measure dropped to 2.4% from 2.7%, and even the trimmed mean declined to 2.3% from 2.4%. Coming days after the devastating 83,900-job loss in February, the disinflation surge makes an April rate cut virtually certain.
Brazil’s IBC-Br economic activity index — the central bank’s GDP proxy — rose 0.80% month-on-month in January, marginally below the 0.85% consensus but a solid rebound from December’s 0.20% contraction. The BCB also released its Focus Market Readout, which tracks analyst forecasts for key economic variables. Mexico’s markets were closed for the Benito Juarez birthday holiday.
Colombia delivered a mixed bag. Industrial production remained in contraction at -0.5% year-on-year, missing the 0.2% consensus, while retail sales decelerated sharply to 7.8% from 11.0% and below the 10.1% forecast. The combination suggests the consumer-led recovery is losing steam as high interest rates and political uncertainty weigh on spending.
Argentina’s February budget balance came in at 1,411 million pesos — still in surplus but well below January’s 3,126 million — as the Milei government’s fiscal consolidation continues at a moderating pace. Housing starts in Canada beat expectations at 250,900 versus 243,000, offering one bright spot amid the otherwise grim labor and inflation picture.
Verdict
Canada’s disinflation narrative is strengthening rapidly. For Latin America, the oil retreat is a lifeline for net importers like Brazil, but Colombia’s fading consumer momentum and Mexico’s holiday closure leave the region data-light heading into a pivotal Fed week.