Seven Fundamentals for the Week: Tariff news, fresh surveys, the Fed's preferred inflation gauge are eyed

• Reports and rumors ahead of Trump’s reciprocal tariffs announcement next week will continue moving markets.
• Business and consumer surveys will try to gauge where the US economy is heading.
• Core PCE, the Fed's preferred inflation gauge, is eyed late in the week.

How is the world's largest economy doing? A slew of reports and also developments related to new tariffs are eyed in the last full week of March. 

1) Will Trump narrow the scope of new measures?

US President Donald Trump is set to announce a fresh round of reciprocal tariffs on April 2. These will reportedly cover trillions of dollars of imported goods, and the announcement will become "Liberation Day." However, there are reports suggesting that the scope may be reduced to specific sectors and that these measures will only be imposed on certain countries.

So far, there is no confirmation nor denial. There is good reason to expect that various options will continue floating in the air throughout the week and also early next week. The narrower the scope and the lower the levies, the better for Stocks. 

However, bad news could follow the latest positive developments.

2) US S&P Global Services PMI provides a sneak peek into March data

Monday, 13:45 GMT. While S&P Global's data does not carry the weight of the Institute of Supply Management (ISM) figures, the insights on how businesses feel about the largest sector in the largest economy are watched closely.

The services sector includes consumption, which is critical in the US. After hitting 51 in February, a similar outcome is on the cards for the March preliminary reading. Any score above 50 represents expansion, while a sub-50 one reflects contraction.

Unless the data is earth-shattering, there could be a reversal to any initial move.  

3) CB Consumer Confidence may counter current gloom

Tuesday, 14:00 GMT. The US Conference Board’s Consumer Confidence gauge has been declining slower than the survey published by the University of Michigan. Nevertheless, the slide below 100 points last month shows that uncertainty weighs on sentiment.

Another deterioration cannot be ruled out in March, but nothing is set in stone. While politics plays a part in how people feel, it is somewhat less pronounced in this survey. 

4) Durable Goods orders provide hard data

Wednesday, 12:30 GMT. US Durable Goods Orders are one way to look at investment, as they measure the cost of orders received by manufacturers for goods planned to last for three years or more. Has confidence in the long term eroded? The main figure is Nondefense Capital Goods Orders ex-Aircarft, or “core of the core.”

After an increase of 0.8% in January, a significant fall may happen. This is the week’s first  “hard data” figure, and it may have a more persistent impact on markets than the surveys released beforehand. 

The data also feed into Gross Domestic Product (GDP) calculation for the first quarter, which currently looks gloomy. 

5) US jobless claims are eyed as a "canary in the coalmine"

Thursday, 12:30 GMT. If there is a Department of Government Efficiency (DOGE)-related hit to unemployment, it will be felt first in US weekly jobless claims. So far, these have been remarkably resilient. So far, so good. 

After hitting 223K last week, a similar 225K outcome is on the cards. A jump above 240K would cause worries. The number of claims has little room to fall. It rarely slips under 200K. 

Note that final GDP data for Q4 2024 is released at the same time, but it will likely be ignored as it refers to the period that ended three months ago. It is a distant history. 

6) Core PCE may convince Fed to move in May

Friday, 12:30 GMT. When it comes to inflation, the core Personal Consumption Expenditures (core PCE) is the gauge favored by the Federal Reserve (Fed). The central bank aims for 2% annual increases, and in January, this measure advanced by 2.6%. Close enough? The last mile is always the hardest, and after bouncing from the lows, there is always room for concern.

This time, optimism about a fall is warranted after the parallel Consumer Price Index (CPI) came out below estimates. The monthly rise is projected to stand at 0.3%, the same as last time.

7) Final UMich data watched more than usual

Friday, 14:00 GMT. The week ends with some soft data point, but the most up-to-date release: a revised version of the closely watched US University of Michigan Consumer Sentiment Index.

The economic calendar points to a confirmation of the low 57.9 score initially reported. However, this gauge is volatile and could jump both ways in the final version.

An update to above 60 would provide some relief, while a fresh decline would raise concerns. Apart from the headline, the 5-year inflation expectations measure – which jumped in the past few readings – may also undergo changes. Markets want more confidence and lower inflation expectations, but the opposite trend has been seen lately. 

Final Thoughts 

While there is no standout economic release, markets remain nervous, and any data point can change the mood abruptly. Trade with care and watch out for tariff headlines.