Week commencing 30 March 2026

US and Australian markets slide as inflation pressures and oil volatility rise

United States equity markets are poised to close out the week lower for a fifth consecutive week, weighed down by persistent geopolitical tensions and elevated oil prices that have intensified stagflation concerns. As we head into month‑ and quarter‑end, the numbers make for grizzly reading: the S&P 500 has fallen 5.84% for March and 5.38% for the first quarter (Q1) of 2026, while the Nasdaq 100 is down 5.50% this month and 6.59% for the quarter. The Dow Jones has tumbled 3,017 points, or 6.16%, in March and 4.38% for the quarter so far.

Closer to home, the ASX 200 is trading at 8461 and remains on track to finish the week modestly higher. However, with just two sessions left in March, the index is still down 7.97% for the month and 2.85% for the Q1. The downdraft reflects the spillover from Wall Street’s risk‑off mood, ongoing disruption from the Middle East conflict, sharply higher energy prices and the impact of back‑to‑back Reserve Bank of Australia (RBA) rate hikes.

The week that was: highlights

• The US S&P Global Composite PMI fell to 51.4 in March from 51.9 prior, signalling a slower rate of expansion
• While the Manufacturing PMI beat expectations, rising to 52.4 (vs consensus 51.3), the Services PMI missed forecasts, dropping to 51.1 against a consensus of 51.5
• Initial jobless claims rose by 5000 from the prior week to 210,000
• Japan’s core inflation rate slowed to 1.6% year‑on‑year (YoY) in February, coming in slightly below the 1.7% consensus and down from 2.0% prior. Headline inflation also cooled to 1.3%, matching market forecasts
• Japanese business activity showed mixed signals with the flash Manufacturing purchasing managers' index (PMI) dipping to 51.4 (missing the 52.8 forecast), while the Services PMI remained in expansion territory at 52.8
• Eurozone consumer confidence deteriorated further in March, falling to −16.3 and missing the consensus forecast of −14.4.
• Eurozone business activity softened, with the Composite PMI dropping to 50.5 from 51.9 prior. Manufacturing provided a bright spot, rising to 51.4 and beating the 49.4 consensus, but Services dragged the index down, falling to 50.1
• In the United Kingdom (UK), core inflation in February rose to 3.2%, up from 3.1% in January
• Australian inflation pressures eased slightly more than expected in February, with the monthly consumer price index (CPI) indicator coming in at 3.7% YoY, just below the 3.8% consensus
• The RBA’s preferred core inflation measure, the trimmed mean CPI, also cooled to 3.3% YoY, coming in under the 3.4% forecast
• Australian business activity contracted sharply, with the flash Services PMI plunging to 46.6 in March from 52.8 prior, while the Manufacturing PMI slipped into neutral territory at 50.1
• WTI crude oil fell 4.25% to $94.05, rebounding from the $84.37 low it hit earlier in the week
• The US dollar index (DXY), gained 0.40% to 99.90
• Bitcoin gained 1.30% to $68,735
• Gold eased 2.35% to $4391
• Wall Street’s gauge of fear, the volatility index (VIX), rose to 27.43 from 26.77 the previous week.

Key dates for the week ahead

Australia & New Zealand

• NZ – ANZ business confidence (Mar): Tuesday, 31 March at 11.00am AEDT
• AU – RBA meeting minutes: Tuesday, 31 March at 11.30am AEDT
• AU – Building permits month‑over‑month (MoM) prelim (Feb): Wednesday, 1 April at 11.30am AEDT
• AU – Balance of trade (Feb): Thursday, 2 April at 12.30pm AEDT

China & Japan

• CN – NBS manufacturing PMI (Mar): Tuesday, 31 March at 12.30pm AEDT
• CN – NBS non‑manufacturing PMI (Mar): Tuesday, 31 March at 12.30pm AEDT
• JP – Tankan large manufacturers index (Q1): Wednesday, 1 April at 10.50am AEDT
• CN – RatingDog manufacturing PMI (Mar): Wednesday, 1 April at 12.45pm AEDT
• CN – RatingDog services PMI (Mar): Friday, 3 April at 12.45pm AEDT

United States

• US – JOLTS job openings (Feb): Wednesday, 1 April at 1.00am AEDT
• US – CB consumer confidence (Mar): Wednesday, 1 April at 1.00am AEDT
• US – Retail sales MoM (Feb): Wednesday, 1 April at 11.30pm AEDT
• US – ISM manufacturing PMI (Mar): Thursday, 2 April at 1.00am AEDT
• US – Initial jobless claims (28 Mar): Thursday, 2 April at 11.30pm AEDT
• US – Non‑farm payrolls (Mar): Friday, 3 April at 11.30pm AEDT
• US – Unemployment rate (Mar): Friday, 3 April at 11.30pm AEDT
• US – ISM services PMI (Mar): Saturday, 4 April at 1.00am AEDT

Europe & United Kingdom

• EA – Inflation rate (Mar): Tuesday, 31 March at 8.00pm AEDT
• EA – Unemployment rate (Feb): Wednesday, 1 April at 8.00pm AEDT

Key events for the week ahead

AU: RBA meeting minutes

Date: Tuesday, 31 March at 11.30am AEDT

At its board meeting last week, the RBA raised the cash rate by 25 basis points (bp) to 4.10% in a 5-4 split, the second consecutive increase after February’s move to 3.85%. Governor Michele Bullock noted that while all members agreed a hike was warranted given renewed inflationary pressures, the split centred on timing rather than the need for action.

Markets will be scrutinising the minutes for clues on whether more tightening is likely, or if the latest move is viewed as sufficient to keep inflation tracking sustainably back toward the 2% − 3% target.

With the Middle East conflict continuing to lift energy prices, traders are bracing for a hawkish tone around inflation persistence, capacity constraints and labour‑market tightness. Any softer language may ease rate‑hike expectations.

The Australian interest rates market is currently pricing in 17 bp of tightening for the May meeting. Further out, markets expect a cumulative 65 bp of increases through 2026, which would lift the cash rate to 4.75%.

RBA cash rate chart

EA: Inflation rate

Date: Tuesday, 31 March at 8.00pm AEDT

Last month, euro area annual inflation rose 1.9% YoY, up from January’s 16‑month low of 1.7%, as energy base effects faded and services inflation remained sticky. The core measure increased to 2.4%.

At its meeting last week, the European Central Bank (ECB) left rates unchanged at 2.00%, but updated forecasts included meaningful upward revisions to inflation due to risks from the Middle East conflict.

The accompanying statement underscored the ECB’s resolve to keep inflation anchored at the 2% target over the medium term, even as uncertainty rises. That tone has shifted European rates pricing to reflect roughly 75 bp of ECB tightening for the rest of 2026.

The March flash reading is expected to show headline inflation rising to 2.7%, while the core measure is expected to remain steady at 2.4%.

 EA Core CPI chart

US: Non-farm payrolls

Date: Friday, 3 April at 11:30 pm AEDT

In February, US non‑farm payrolls unexpectedly contracted by 92,000 jobs after a downwardly revised 126,000 gain in January, far below the expected 60,000 increase. The unemployment rate rose to 4.4%, edging closer to November’s four‑year high of 4.5%.

After the February shocker, the March report will be watched closely for confirmation that the slowdown is temporary and not the start of something more structural, especially with the Federal Reserve (Fed) already signalling a data‑dependent approach amid elevated uncertainty from the Middle East.

The March report is forecast to show a modest rebound of around 50,000 jobs, with the unemployment rate remaining at 4.4%. The US rates market is currently pricing in a 50% chance of a Fed rate hike before year‑end.

US unemployment rate chart