March 29, 2024

Central Banks & Ukraine conflict remain in focus

Central Banks & Ukraine conflict remain in focus

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Russia-Ukraine conflict continues for a fourth week with no sign of a ceasefire. Headlines around Ukraine could continue to create volatility in the coming week. 

The early tightening cycle by Central Banks last week has been well received by markets. Central bank policies remain focused on speeches from Fed and ECB policymakers due this week. Investors are looking for monetary policy clues and clarity, focusing mainly on the speed and size of future rate hikes. 

UK Budget and EU PMIs highlight this week’s, otherwise light, docket of regularly scheduled economic releases. Also, reports on US factory activity and the housing market are of investors’ interest. 

On Wednesday, traders will be focused on the UK Annual Budget Release. UK citizens are already facing inflationary pressure from higher energy bills (costs for natural gas, electricity, fuel). Moreover, U.K. consumer prices rose at their fastest pace in three decades in January. 

On Thursday, German Flash Manufacturing and services PMI data are released.

The coming week in the markets is likely to be dominated by continuing risk-on sentiment unless there is an escalation over Ukraine conflict.