(Reuters) – Some of U.S. President Donald Trump’s tariffs are expected to come into effect before key jobs data, China policymakers meet for an annual congress, the ECB is tipped to cut rates and the first phase of the Israel-Hamas ceasefire deal nears its end.
Here’s a look at the week ahead in markets from Rae Wee in Singapore, Lewis Krauskopf in New York and Yoruk Bahceli, Amanda Cooper and Karin Strohecker in London.
1/ SERIOUSLY AND LITERALLY
“Take him seriously…but not literally” seems to be the advice from would-be Trump whisperers to anyone pondering why market reaction to the U.S. president’s often-confusing messaging on tariffs has become increasingly muted.
A 25% tariff on Mexico and Canada is going ahead on March 4, while China gets an extra 10% on top of the 10% that came into force on February 4.
Trump says he’ll slap 25% on European imports of “cars and all of the things”, which has knocked the euro off one-month highs and dented regional stocks.
But uncertainty is rising. The “Trump bump” to growth investors had banked on does not appear to be happening and the reality of widespread tariffs on imports of anything from avocados to building supplies is starting to hit home.
2/ WHAT DID YOU DO LAST WEEK?
U.S. jobs data on March 7 comes as worrisome indicators about business activity and consumer confidence raise yellow flags about the economy and a push by the Trump administration to slash the federal workforce.
The February payrolls report is expected to show an increase of 133,000 jobs, according to a Reuters poll. Payroll growth slowed to 143,000 jobs in January, below estimates, but the unemployment rate stood at 4.0%, its lowest since May.
Meanwhile, President Trump’s administration ramped up the groundwork for those large-scale layoffs, as downsizing czar Elon Musk pledged to move quickly to slash spending. Tens of thousands of U.S. government workers have been fired in recent weeks, according to a Reuters tally of announcements tracking Trump’s plan to shrink the federal workforce.
3/PLEDGING SUPPORT
China’s highly anticipated National People’s Congress (NPC) meeting kicks off on Wednesday – the stage for policymakers to unveil key economic targets, budget and policy goals for the year ahead.
Despite uncertainty over Trump’s tariffs and mounting Sino-U.S. tensions, Beijing is expected to stick to its 2025 growth target at around 5%, though a Reuters poll showed economists expect 4.5% this year. Meanwhile, the inflation target is likely to be lowered as deflationary pressures persist in the world’s second-largest economy.
A show of greater fiscal support is also expected, as authorities seek to boost consumption and bolster growth – though this will likely result in the widening of the budget deficit to 4% of gross domestic product, its highest on record.
4/ LET’S CUT, FOR NOW
The European Central Bank is expected to cut rates again on Thursday, but markets have not been this uncertain in a while on what comes next.
Investors predict 85 basis points to be shaved off interest rates by year-end – three cuts and a chance of a fourth to put the benchmark rate near 2%. But in a sign of uncertainty, traders expect less than a 70% chance of an April cut.
Policymakers look equally divided – a top hawk has even questioned whether ECB policy is still restrictive.
U.S. tariff risks, a new German government, a potential Ukraine ceasefire and a surge in expected defence spending could all shape the pace of cuts in the months ahead.
5/ TIME IS TICKING
The first phase of the temporary ceasefire between Israel and Hamas comes to an end on Saturday, with no clear path charted as yet on how the two sides can emerge from the war that has shaped the region for nearly 1-1/2 years.
Israel negotiators headed to Cairo seek to extend a first ceasefire phase, in the apparent aim of securing the release of more hostages while delaying any final deal on Gaza’s future. Hamas says it is prepared for second phase talks and the full withdrawal of Israeli forces. Trump said on Thursday there were “pretty good talks going on” regarding Gaza, but offered little detail.
The devastating conflict has reverberated through energy markets, as well as stocks and bonds in the region. Much will hinge on the outcome of the negotiations.
(Graphics by Kripa Jayaram, Prinz Magtulis, Pasit Kongkunakornkul, Vineet Sachdev and Sumanta Sen; Compiled by Karin Strohecker; Editing by)
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