March 23 – 29, 2026: Weekly economic update

The conflict in the Middle East currently shows no clear path to resolution; the negotiating positions remain unacceptable to both sides. Accordingly, pressure on equity indices persisted last week.
However, at the start of this week, U.S., European, and Asian markets are edging higher, while Treasury bond yields are declining. Oil futures opened with an upward gap but are now retreating.
Central bank rhetoric is deteriorating.

United States (key points)

• The policy rate remains unchanged; the tone is cautious;
• Monetary policy remains moderately tight;
• U.S. macroeconomic data continue to support a soft landing scenario: inflation risks are rising, the labor market is cooling without signs of recession, and at this stage does not warrant a rate cut.

INFLATION: CONSUMER PRICE INDEX (FEBRUARY):

• Core CPI: (m/m) 0.2% (prev: 0.3%); (y/y) 2.5% (prev: 2.5%).
• CPI: (m/m) 0.3% (prev: 0.2%); (y/y) 2.4% (prev: 2.4%).

PRODUCER PRICE INDEX (FEBRUARY):

• PPI (m/m): 0.7%, prev: 0.5%.
• Core PPI (m/m): 0.5%, prev: 0.8% (revised):

INFLATION EXPECTATIONS (MICHIGAN) (FEBRUARY):

• 12-month inflation expectations: 3.8%, prev: 3.4%.
• 5-year inflation expectations: 3.2%, prev: 3.3%.

GDP (U.S. Bureau of Economic Analysis, BEA) (Q4 2025, annualized, second estimate): +0.7% (Q3 2025: +4.4%):

The GDPNow indicator (a “real-time” estimate of official GDP prior to its release) by the Federal Reserve Bank of Atlanta: 2.3% (previous: 2.2%).

BUSINESS ACTIVITY INDEX (PMI) (MARCH, PRELIMINARY DATA):

(Above 50 indicates expansion; below 50 indicates contraction)

• Services sector: 51.1 (prev: 51.7);
• Manufacturing sector: 52.4 (prev: 51.6);
• S&P Global Composite: 51.4 (prev: 51.9).

LABOR MARKET (BLS) (FEBRUARY)

• Unemployment rate: 4.3% (prev: 4.4%);
• Total number of continuing jobless claims in the U.S.: 1,819K (prev: 1,851K);
• Initial jobless claims: 210K (prev: 205K);
• Change in nonfarm payroll employment: 130K (prev: 48K);
• Change in private nonfarm payroll employment: 172K (prev: −64K);
• Average hourly earnings (y/y): 3.7% (prev: 3.8%);
• JOLTS job openings: 6.542M (prev: 6.928M).

MONETARY POLICY

Federal Reserve officials last week indicated that the rate-cutting cycle may have come to an end (WSJ).

Hearings in the U.S. Senate Banking Committee to confirm Kevin Warsh (a Trump appointee) as Chair of the Federal Reserve are scheduled for mid-April; Powell’s term expires in May. It is quite possible that, under a new Chair, the Fed could cut rates if the situation around the Strait of Hormuz begins to stabilize.

• Effective Federal Funds Rate (EFFR): 3.50%–3.75%;
• The Federal Reserve’s balance sheet stands at $6.657 trillion, up 1.87% since the suspension of QT ($6.535 trillion):

MARKET FORECAST FOR RATE (FEDWATCH)

For the next meeting (April 29): the estimated probability of the rate remaining unchanged is 96.38%; an increase is 3.62%; a decrease is 0%.

Over the next 12 months, the market is not pricing in any rate cuts:

Today:

А week earlier:

SP500

Weekly performance: –2.12% (week-end close at 6368,86); year-to-date: -6,96%.

NASDAQ100

• Weekly performance: -3,20% (week-end close at 23132,77); year-to-date: -8,38%.

RUSSEL 2000 (RUT)

• Weekly performance: +0,46% (week-end close at 2449,69); year-to-date: -1,30%.

VIX

• VIX (Volatility Index): 30,89

Eurozone

• The policy rate remains unchanged for now, but inflation risks are rising;
• The monetary policy stance is neutral, though the balance of risks is tilted toward inflation;
• As the conflict in the Middle East escalates, the ECB has revised its GDP forecasts downward and raised its inflation projections for the coming years.

Interest rates:

• Deposit facility rate: 2.0% (previous: 2.0%);
• Marginal lending facility rate: 2.4% (previous: 2.4%) (the rate at which banks can borrow overnight from the regulator);
• Main refinancing (key) rate: 2.15% (previous: 2.15%).

Inflation: Consumer Price Index (CPI) (February):

• Core CPI (YoY): 2.4% (previous: 2.2%);
• CPI (MoM): 0.6% (previous: -0.6%, revised);
• CPI (YoY): 1.9% (previous: 1.7%).

GDP for Q4 (final): QoQ: 0.3% (previous: 0.3%); YoY: 1.3% (previous: 1.4%).

Unemployment rate (February): 6.10% (previous: 6.20%).

Purchasing Managers’ Index (PMI) (March):

• Services: 50.1 (previous: 51.9);
• Manufacturing: 51.4 (previous: 50.8);
• S&P Global Composite: 50.5 (previous: 51.9).

EURO STOXX 600 (FXXP1!)

• Weekly performance: +0,55% (Week-end close: 569,9); Year-to-date: -4,06%.

China

The economy is stabilizing on the back of exports, while domestic demand and investment remain weak; stimulus measures are targeted and cautious.

• Rates remain unchanged;
• The monetary policy stance is accommodative;
• China has reaffirmed continued fiscal support for economic growth under its 2026 plan (stimulating domestic demand, optimizing tax incentives and subsidies, and modernizing industry).

Interest rates:

• 1Y Loan Prime Rate (medium-term lending): 3.00%;
• 5Y Rate (five-year rate, affecting mortgages): 3.50%.

Inflation indicators (February):

• Consumer Price Index (CPI) (MoM): 0.1% (previous: 0.2%); 1.3% (previous: 0.2%);
• Producer Price Index (PPI) (YoY): -0.9% (previous: -1.4%).

GDP for Q4 (final): QoQ: 1.2% (previous: 1.1%); YoY: 4.5% (previous: 4.8%).

Unemployment rate (February): 5.3% (previous: 5.1%).

Industrial production (February, YoY): 6.3% (previous: 5.9%).

Fixed asset investment (January, YoY): -3.8% (previous: -2.6%).

Retail sales (January, YoY): 0.9% (previous: 1.3%).

Imports (February, YoY): 19.8% (previous: 5.7%).

Exports (February, YoY): 21.8% (previous: 6.6%).

Trade balance (USD) (February): 213.62 bn (previous: 114.11 bn).

Purchasing Managers’ Index (PMI) (February):

• Manufacturing: 49.0 (previous: 49.3);
• Non-manufacturing: 49.5 (previous: 49.4);
• Composite: 49.5 (previous: 49.8).

CSI 300 INDEX (000300.HK)

Weekly performance: -1,41% (week-end close at 4502,5698); Year-to-date: -3,41%.

Hang Seng TECH Index (HSTECH)

Weekly performance: -1,94% (week-end close: 4778,01); year-to-date: -13,20%.

BOND MARKET

U.S. Treasury bonds 20+ years (ETF TLT): weekly performance: -0,22% (week close: 85,64); year-to-date: -1,74%.

YIELDS AND SPREADS

Since the onset of the conflict, yields have continued to rise across the entire curve—particularly at the long end—indicating increasing inflation expectations:

The chart shows the results of U.S. 2-year Treasury (2Y) auctions using the tail/through metric:

• Green bars (through) — strong demand (the auction clears better than expected, with lower yields at issuance);
• Red bars (tail) — weak demand (the auction clears worse than expected, with higher yields at issuance).

The latest auction showed the weakest demand for 2Y Treasuries since March 2023.

This is an important signal for the money market — the short end of the curve is the first to “break,” as the 2Y yield effectively reflects expectations for the Fed’s policy rate.

• Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity: 4.39% (previous: 4.41%);
• 2-year yield: 3.88% (previous: 3.94%);
• ICE BofA BBB US Corporate Index Effective Yield: 5.% (previous: 5.29%);

• The yield spread between 10-year and 2-year U.S. Treasuries stands at 51 basis points (previous: 47);
• The yield spread between 10-year and 3-month U.S. Treasuries stands at 69 basis points (previous: 70).

The cost of the 5-year U.S. Credit Default Swap (CDS) (default insurance): 37.81 bps (vs 35.35 bps last week).

GOLD FUTURES (GC)

Weekly performance: -1,80% (week close: $4492,5 per troy ounce); Year-to-date: +3,70. Most central banks will continue to increase their gold reserves.

OIL FUTURES

Weekly performance: +1,45% (week-end close: $99,65 per barrel). Year-to-date performance: +73,58%

• IEA member countries have begun drawing on their reserves.
• Geopolitical risks in the Middle East region may take on a long-term character.

DOLLAR INDEX FUTURES (DX)

Weekly performance: +0,69% (week-end close: 100,193). Year-to-date performance: 2,24%.

BTC FUTURES

Weekly performance -2,81% (week-end close: $65954); year-to-date: -24,81%.

ETH FUTURES

Weekly performance -3,43% (week-end close: $1982,5); year-to-date: -33,34%.

BTC — netflows have remained negative for nearly a full month:

This sustained outflow indicates accumulation by investors who continue to buy and withdraw their BTC from exchange platforms.

Demand is not yet strong enough to resume an upward trend, but it clearly points to ongoing accumulation and is likely one of the factors behind the range-bound behavior observed over the past two months.

TOTAL CRYPTOCURRENCY MARKET CAPITALIZATION

Total crypto market capitalization: $2,33 trillion (vs $2,34 trillion a week earlier) (coinmarketcap.com).

Crypto asset market shares:

• Bitcoin: 58.0% (58.3%)
• Ethereum: 10.6% (10.6%)
• Others: 31.3% (31.2%).

ETF Net Flows Chart: