S&P 500 futures are up 0.7%, boosted by news regarding US tariffs, with the White House likely omitting some from the April 2 deadline. This development has contributed to a recent recovery in Wall Street’s performance.
In foreign exchange, the dollar shows muted movement as the month and quarter-end approaches, with USD/JPY rising 0.3% to 149.80. Other major currencies remain relatively stable.
Euro Area Economic Outlook
Upcoming euro area PMI data are expected to indicate a slight increase in activity for March, with attention on the impact of the German debt brake reform. Reports that suggest growth won’t necessarily compel the ECB to act in April, although current inflation pressures may influence decisions.
That S&P 500 futures have climbed 0.7% points to growing optimism about trade policy adjustments. With reports indicating that Washington may exclude certain tariffs ahead of the April deadline, sentiment has improved. This has aided a rebound in US equities that had faced some hesitation in recent sessions. The market now appears to be looking ahead with more confidence, factoring in the possibility of fewer trade restrictions weighing on corporate earnings.
The movement in major currencies reflects a somewhat restrained trading environment as investors prepare for month- and quarter-end positioning. While the dollar has barely moved overall, its gains against the yen suggest wider expectations that US interest rates are unlikely to drop quickly. With USD/JPY edging up to 149.80, the yen remains under pressure, though broader currency markets remain relatively still.
As for Europe, upcoming purchasing managers’ data will offer another indication of whether business conditions are improving. Forecasts point to a modest pickup in activity this month, though much of the attention will be on Germany’s fiscal changes. The ongoing discussions around reforming the debt brake could shape growth prospects. Yet, even with signs of a marginal recovery, policymakers in Frankfurt may not be inclined to shift their stance just yet. Price pressures persist, and inflation levels will remain a central factor in determining the path ahead.
Market Considerations Ahead
Over the next few weeks, these considerations will be essential in shaping both equity and currency markets. If upcoming data reinforce expectations of resilient economic conditions in the US while Europe’s recovery remains tentative, certain trades may gain momentum. Inflation will continue to dictate monetary policy expectations, and any unexpected shifts on that front could prompt sharper reactions.
