USA

U.S. data during the last week pointed to an economy that was still expanding, but with inflation risks clearly re-accelerating. The latest official growth backdrop remained softer than late 2025, with Q4 2025 real GDP up 0.7% annualized after 4.4% in Q3, while the latest inflation prints still looked relatively contained before the recent oil shock: February CPI was 2.4% YoY and January PCE inflation was 2.8% YoY. The week’s fresh releases were stronger on activity and labor: ISM manufacturing rose to 52.7 in March, the best since August 2022, though its prices index jumped sharply, signaling renewed cost pressure; initial jobless claims for the week ended March 28 fell to 215,000, with the four-week average down to 207,750; and March nonfarm payrolls increased by 178,000 while unemployment held at 4.3%. February retail sales also rose 0.6%, suggesting the consumer entered Q2 with some momentum. Markets interpreted the data as “good growth, but more inflation risk,” especially as the Middle East conflict pushed oil above $110 and gasoline above $4 per gallon. Even so, risk appetite improved on hopes of de-escalation, and in the shortened week the S&P 500 rose about 3.4%, the Nasdaq 4.4%, and the Dow roughly 3.0%, ending a five-week losing streak.

Europe

Europe’s macro picture weakened on inflation but held up on activity. The key official release was Eurostat’s flash March CPI at 2.5% YoY, up from 1.9% in February, with energy inflation rebounding to 4.9%, a direct sign that the oil shock was feeding through. Labor data remained relatively resilient, with euro area unemployment at 6.2% in February, only slightly above January’s 6.1%. On growth, the latest official figures showed the euro area economy still expanding modestly: Q4 2025 GDP rose 0.2% q/q, and 2025 full-year GDP grew 1.4%. Business surveys were better on the surface but less reassuring underneath: the March euro area manufacturing PMI rose to 51.6, the strongest since mid-2022, yet Reuters and S&P Global both stressed that part of that improvement reflected supply delays and input shortages rather than a clean demand upswing. Equity markets therefore traded in a highly headline-driven fashion. The STOXX Europe 600 started the week firmer, jumping 2.5% on April 1 on hopes of Middle East de-escalation, then turned choppier as Hormuz-related fears returned; national indices such as the IBEX 35 posted gains of more than 3% during the rebound, while the FTSE 100, DAX 40, and CAC 40 also recovered with banks and defense stocks leading and travel/energy reacting to each swing in crude prices. The message from Europe was clear: resilient growth, but a more difficult policy mix as energy-driven inflation returns.

Japan

Japan’s data flow was mixed, with business sentiment improving but real-economy indicators showing strain from higher energy costs and weaker household demand. Inflation looked temporarily softer in Tokyo: Tokyo core CPI slowed to 1.7% YoY in March, below the BOJ’s 2% target for a second straight month, though underlying inflation excluding fresh food and fuel remained firmer. The latest official growth figures were better than first thought, with Q4 2025 GDP revised up to a 1.3% annualized expansion. Labor conditions remained tight, with February unemployment at 2.6%, but industrial data softened as February factory output fell 2.1% m/m. The most important release of the week was the Bank of Japan’s March Tankan, which showed large manufacturers’ sentiment improving to +17 and large non-manufacturers staying strong at +36, while firms projected 3.3% capex growth for fiscal 2026. At the same time, the private-sector March manufacturing PMI eased to 51.6 from February’s stronger level, suggesting expansion continued but lost some momentum. For equities, that mix produced a volatile but not disastrous week: Japanese stocks remained sensitive to oil, the yen, and global risk sentiment, yet the combination of still-positive PMIs, stronger GDP revisions, and solid Tankan data helped keep the Nikkei 225 and TOPIX supported after late-March stress, with the Nikkei rebounding again into April 6 trading. In short, Japan entered Q2 with decent corporate confidence, but the external energy shock remained the dominant macro risk.

China

China’s week was defined by a clear improvement in March PMIs, but markets remained cautious about whether that rebound can survive higher energy prices and weak external demand. The latest official inflation data still showed room for policy support, with February CPI up 1.3% YoY, while the broader growth backdrop remained respectable: 2025 GDP rose 5.0%, meeting the government’s target. Labor conditions were stable rather than strong, with the surveyed urban unemployment rate at 5.3% in February and unchanged on average in the first two months of the year. The major weekly release was the official March manufacturing PMI at 50.4, up from 49.0, with non-manufacturing at 50.1 and the composite index also back above 50, signaling recovery after the Lunar New Year distortion. However, the details were mixed: input costs rose sharply and export orders remained weak. Private-sector data also suggested an uneven rebound, as China’s services PMI slowed to 52.1 in March from February’s very strong 56.7. Equity performance reflected that tension. Mainland shares took some support from the better PMI data, but gains were limited by imported inflation worries and geopolitical uncertainty; Hong Kong trading was also affected by the holiday calendar, leaving the Shanghai Composite steadier than many regional markets while the Hang Seng remained more subdued and sentiment-sensitive. Overall, China ended the week with better headline activity data, but investors still needed firmer domestic demand and less external shock risk before turning decisively bullish.