Another week of intense global tensions, high-level meetings between world leaders, and tariff discussions has largely overshadowed the economic calendar. With a relatively quiet week for data releases, this is perhaps unsurprising. However, given the current geopolitical climate since Donald Trump secured his second term as U.S. President, it would take something truly monumental to shift the focus away from international affairs.
The first major economic data release of the week arrived on Thursday in the form of the U.S. Prelim GDP q/q. Forecasts had anticipated an unchanged figure of 2.3%, and as expected, the data confirmed this projection, resulting in minimal market impact. However, the U.S. unemployment claims data, released at the same time, proved slightly more noteworthy. Expectations were for a modest increase from 220k to 222k, but the final figure came in significantly higher at 242k. This unexpected rise suggests that the labour market may not be as resilient as previously thought, though a clearer picture will emerge with the release of the non-farm payroll data next Friday.
Today, there are a couple of significant data points to monitor. In the Eurozone, Germany’s Prelim CPI m/m is set for release. Forecasts anticipate a notable increase from the previous figure of -0.2% to 0.4%, aligning with ECB warnings that persistent inflation remains a concern. Later in the afternoon, the U.S. will publish its Core PCE Price Index m/m data, with forecasts predicting a slight rise from 0.2% to 0.3%, further reinforcing the expectation that inflationary pressures will persist well into the year.
Despite the light economic calendar, markets have remained highly volatile. Trump’s proposed “Mineral Peace” deal between Ukraine and Russia appears to be on the verge of finalisation, prompting European nations to seek reassurances regarding the U.S. commitment to maintaining stability.
Additionally, Trump held meetings with French President Emmanuel Macron and UK Prime Minister Keir Starmer this week. The contrast in receptions was stark—Macron was greeted by Trump’s Chief of Protocol rather than the President himself, a notable break from tradition. Tensions between the two leaders remained evident, with Macron interrupting Trump on Ukraine discussions and being seated in a visibly smaller chair at the corner of Trump’s desk. In contrast, Starmer received a warm welcome outside the White House, complete with a full presidential greeting and a seat directly next to Trump. Notably, Trump hinted at a potential U.S-UK trade deal featuring zero tariffs on UK goods, a move that can only be seen as a diplomatic win for Starmer.
Next week promises to be busier in terms of economic data, with the ECB’s latest interest rate decision and the U.S. non-farm payroll report taking centre stage. However, geopolitical factors are likely to remain the primary market drivers, with the Ukraine peace deal, U.S-UK trade negotiations, and the imminent implementation of tariffs on Mexico and Canada (set for March 4) expected to dominate headlines.
As global markets navigate these developments, investors and policymakers will be closely watching how these economic and geopolitical factors shape the financial landscape in the weeks ahead.
