Global Economic Events to Shape Market in Coming Week

Next week is set to be a pivotal period for global economic events, with several key developments on the horizon. The implementation of reciprocal tariffs between the United States and China, the release of inflation data from both countries, the publication of China's financial data, the Federal Reserve's meeting minutes, and the commencement of the first-quarter earnings season are all significant events that will shape the economic landscape.

The United States will implement its "reciprocal tariffs" on April 9, which will affect all countries. China has already announced countermeasures, starting April 10, by imposing a 34% tariff on all imported goods from the United States. This move is in response to the U.S. tariffs and aims to mitigate the economic impact on China. The European Union is also considering using its "Anti-Coercion Instrument" (ACI) to retaliate against the U.S. tariffs, particularly targeting the service sector, which is a critical pillar of the U.S. economy. The EU's countermeasures, initially planned in two stages, have been delayed until mid-April to allow for further discussions with the U.S. government.

China will release its March CPI and PPI inflation data on April 10, along with social financing, credit, and foreign exchange reserve data. These figures will provide insights into the country's economic health and inflation trends. In February, China's CPI decreased by 0.7% year-on-year, while the PPI fell by 2.2%. The upcoming data will be crucial for understanding the impact of recent economic policies and global commodity price fluctuations.

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In the United States, the March CPI data is expected to show a slight decrease, with the core CPI, which excludes volatile food and energy costs, projected to rise by 0.3% month-on-month and 3% year-on-year. However, the implementation of new tariffs by the U.S. could lead to increased inflationary pressures. Economists will closely monitor the March data to assess how quickly the tariffs are being passed on to consumers. The Federal Reserve's March policy meeting minutes, to be released on April 9, will provide further insights into the central bank's stance on inflation and the economic outlook. The minutes may reveal concerns about rising short-term inflation expectations and the economic uncertainty caused by the new tariffs. The Fed has maintained its federal funds rate target range at 4.25%-4.5% and has paused rate cuts for the second consecutive meeting. The minutes could also offer clues about the pace of balance sheet reduction, which the Fed began slowing down in April.

Additionally, the first-quarter earnings season will kick off, with key companies in both China and the United States set to report their financial results. In China, companies such as Chang'an Automobile and Cambrian will be in the spotlight, while in the U.S., major banks like jpmorgan chase, wells fargo, morgan stanley, and blackrock will release their earnings reports. These reports will provide valuable insights into the financial health of these companies and the broader economic trends.