Seven major central banks will have their meetings in the coming week with only RBA expected to act. The remaining six will make no changes to rates and will signal data dependence and meeting-by-meeting approach in face of heightened geopolitical uncertainty. Additionally, we will get employment data from the UK and Australia as well as inflation data from Canada and economic activity data from China. News regarding US – Iran war will continue having big impact on markets, primarily on oil market.
USD
Oil has started the week with a big gap up, crossing $100 level with WTI getting close to $120. The price on Monday jumped almost 30% thus potentially making it the biggest daily gain ever. Finance ministers of G7 countries met and discussed co-ordinated action of releasing strategic oil reserves in order to combat surging oil prices. The news about potential release of reserves plunged oil towards the $80 level thus instead of making biggest one-day gain it made a biggest one-day reversal. President Trump stated that war of Iran will be over soon stating that they have destroyed a great deal of Iran’s military capabilities. He added that Straight of Hormuz is of much bigger importance for China than for the US.
IEA has officially recommended that countries should release around 400 million barrels of oil from their strategic reserves. The speed of the release of reserves will vary from country to country and will depend on the circumstances of particular countries. US has announced it will release 125 million barrels of oil from its strategic petroleum reserves over the course of three months.
February CPI numbers came in line with expectations and unchanged from January readings of 2.4% y/y for headline and 2.5% y/y for core. Monthly readings also came in as expected but headline ticked up to 0.3% from 0.2% while core reading ticked down from 0.3% to 0.2%. Supercore reading dropped to 0.350% m/m from 0.593% m/m the previous month. Inflation is holding steady but the prospect of it rising due to surging oil prices will keep Fed in pause mode until the end of Powell’s mandate.
Second reading of Q4 GDP saw further revisions as it was reduced down to 0.7% from 1.4% annualized in the advanced reading. All of components were revised down with personal consumption adding 1.33pp followed by gross private fixed investment 0.57pp. On the other hand, net exports and government spending both deducted from the reading with former taking away 0.22pp and later 1.03pp. Q4 was impacted by a long government shutdown which is reflected in the numbers. GDP deflator was revised higher indicating persistent inflationary pressures.
January PCE data showed headline number tick down to 2.8% y/y from 2.9% y/y in December while core PCE dropped to 2.8% y/y from 3% y/y the previous month with markets expecting a 3.1% y/y print. Headline PCE rose 0.3% m/m as expected, slower than 0.4% m/m in December while core PCE rose by 0.4% m/m for the second straight month. Couple of more 0.4% m/m prints and core PCE will annualize to more than targeted 2%.
The yield on a 10y Treasury started the week at 4.13%, rose to 4.29% and finished the week at around 4.28%. The yield on 2y Treasury started the week at 3.56%, rose to 3.77% and finished the week at around 3.73%. Spread between 2y and 10y Treasuries started the week at 58bp and finished the week at 55bp. FedWatchTool sees the probability of a 25bp rate cut at March meeting at around 1% while probability of no change is at around 99%. After a very volatile start to the week WTI finished the week almost at a $100/bbl as it gained more than 8% w/w and 71% YTD.
This week we will have FOMC meeting. No change in rates is expected but we will get new Summary of Economic Projections and Dot Plot.
Important news for USD:
Wednesday:
Fed Interest Rate Decision
EUR
Member of the ECB Governing Council Peter Kazimir warned markets that rate hikes due to situation in Iran may be closer than previously thought. He clarified that ECB is still in a good place but added that they are prepared to act if situation calls for it. Kazimir added that rate hike will not come next week. He is a hawkish leaning member so his clear hawkish comments did not carry that much weight although they managed to keep EUR supported. Markets are fully pricing one rate hike by the end of the year.
This week we will have ECB meeting. Policymakers have signaled that policy is in a good place so there will be no change, but it will be interesting how they will assess potential impacts of US – Iran war.
Important news for EUR:
Thursday:
ECB Interest Rate Decision
GBP
UK economy started 2026 flat. There was no growth in January compared to December while in December economy grew by 0.1% m/m. Services came in flat on the month while a growth of 0.2% was expected. Construction output rose 0.2% m/m followed by manufacturing production rising 0.1% m/m.
This week we will have employment data and BoE meeting. There will be no rate cut as inflation is running high and with oil spike it will stay elevated.
Important news for GBP:
Thursday:
BoE Interest Rate Decision
Payrolls Change
Unemployment Rate
AUD
RBA deputy governor Hauser warned that that oil price shocks caused by US-Iran war are increasing uncertainty and pushing inflation risks higher. He added that there will be a constructive policy debate at next meeting. Markets interpreted his comments as hawkish and are now pricing in greater chances of a rate hike next week. Additionally, some major banks are on board for both March and May rate hikes and that is pushing AUD higher making it the best performing currency of the week. March Inflation expectations jumping to 5.2% from 5% vindicate calls for more rate hikes.
February CPI jumped to 1.3% y/y from 0.2% y/y in January thus beating expectations and making it the highest reading in over three years (since January of 2023). Due to the Lunar New Year holidays food prices surged 1.7% y/y from -0.7% y/y the previous month and thus lifted the headline number. Core inflation was unchanged at 1.2% y/y. PPI continued to improve and printed -0.9% y/y after a -1.4% y/y print in January and much better than -1.2% y/y as expected. Surging oil prices should bring even higher March CPI and push PPI closer to the positive territory for the first time since September of 2022.
January-February trade surplus surged to $213.6bn, smashing expectations of a $179.6bn surplus, as exports rose 21.8% y/y and imports rose 19.8% y/y. Exports are moving from the US (-11%) to Africa (49.9%). Semiconductors, ships and autos remain the biggest exports. The most imports are coming from India (43.1%), Korea (35.8%) and Australia (33.8%) while imports from the US declined by 26.7%. Automatic data processing machines and semiconductors constitute the biggest imports. China is a big importer of oil and around 90% of oil coming from Iran was going to China. With oil prices surging it will impact Chinese imports in the following months and put a lid on surging trade surplus.
This week we will have employment data and RBA meeting from Australia as well as economic activity data from China. RBA is widely expected a 25bp rate hike with potentially hinting at another one in May.
Important news for AUD:
Monday:
Industrial Production (China)
Retail Sales (China)
Tuesday:
RBA Interest Rate Decision
Thursday:
Employment Change
Unemployment Rate
NZD
Kiwi was driven fully by risk-on/risk off mood in the markets and it finished the week lower from where it started. The economy is well insulated from the US- Iran war but currency is suffering from the risk appetite in the markets.
CAD
February employment report showed that economy lost another 83.9k jobs after a loss of 24.8k jobs in January thus lifting total job losses in 2026 to 118.7k. Markets were expecting economy to add 10k jobs in February and they were hit by a huge miss. The unemployment rate jumped to 6.7% from 6.5% while expectations were for a 6.6% print while participation rate ticked down to 64.9% from 65% the previous month. Since so many people lost their jobs average wages surged to 4.2% y/y from 3.3% y/y in January. Composition of jobs was yet another dreadful data point as all of the jobs lost (-108.4k) were full-time jobs while economy added 24.5k part-time jobs. CAD has benefited during the week from higher oil prices but jobs report for 2026 will lower chances of rate hikes from BoC regardless of the inflation prints.
This week we will have inflation data as well as BoC meeting. There will be no change to the rate and we could see bank downplaying chances of any further rate hikes.
Important news for CAD:
Monday:
CPI
Wednesday:
BoC Interest Rate Decision
JPY
Q4 GDP was heavily revised up and it now shows growth of 1.3% annualized and 0.3% q/q vs 0.2% annualized and 0.1% q/q as preliminary reported. Gains were led by business investment which rose 1.3% and private consumption that grew by 0.3%. Net exports were flat on the quarter. Growth is picking up which should nudge BoJ to pick up the pace of policy normalization but with US – Iran war disrupting oil supply and increasing prices we should expect the bank to remain cautious and continue with accommodative monetary policy. If G7 decides in favor of a co-ordinated strategic oil release it is calculated that Japan’s public and private reserves could cover domestic demand for almost 254 days.
Average wages showed a 3% y/y growth in January after a 2.4% y/y growth in December. Additionally, real wages, nominal minus inflation, rose for the first time in a year showing a 1.4% y/y growth vs 0.9% y/y growth. Household spending declined 1% y/y as consumer is not feeling very confident in spending.
This week we will have BoJ meeting. No change is expected but wording and vote will be watched carefully for any signals about future moves.
Important news for JPY:
Thursday:
BoJ Interest Rate Decision
CHF
SNB total sight deposits for the week ending March 6 came in at CHF454.1bn vs CHF459.8bn. After rising previous two weeks sight deposits are again moving towards the bottom of the range. With EURCHF hovering around the psychologically important level of 0.90 we could see SNB stepping in and using sight deposits to fight Swissy’s strength.
This week we will have SNB meeting. No change in rate is expected as rate is already at 0 and the bank stated that the bar for driving rates into negative territory is high.
Important news for CHF:
Thursday:
SNB Interest Rate Decision
