Risk-off sentiment prevailed in the global markets last week after US President Donald Trump confirmed that he would proceed with auto and reciprocal tariffs on Wednesday this week. Adding to concerns, hotter-than-expected US Personal Consumption Expenditure (PCE) data fuelled worries that the US economy may be slipping into stagflation, with potential repercussions for global markets.
Against this backdrop, this week’s US employment data will be closely scrutinised, as any signs of a weakening labour market could accelerate the downturn in equities. Investors will also monitor the economic fallout from Trump’s tariffs and possible retaliatory measures from Canada, the European Union, and China. Other major economic data to be watched include the eurozone’s flash inflation data and the Reserve Bank of Australia’s (RBA) interest rate decision.
