Fra Danske Bank:
Sofie Pedersen, [email protected] , Assistant Analyst
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In the euro area, focus turns to the German flash inflation print and the seller price expectations in the EU Commissions’ business surveys for March. German inflation is projected to rise to 2.7% y/y from 1.9% y/y, driven entirely by energy prices. As the data does not fully reflect the war’s impact, the EU Commission’s survey on selling price expectations, which the ECB is closely monitoring as noted by President Lagarde, will also be critical.
Also in the euro area, ECB’s Stournaras is giving a speech today and markets will be looking for comments on monetary policy and inflation.
In Sweden, retail sales figures for February are likely to hold limited significance, given recent developments in the Middle East. That said, recent months have shown a disconnect between retail sales and consumer confidence. Notably, January saw a 4.1% y/y rise in retail sales, despite weak consumer confidence.
In the US, Fed chair Powell and Fed’s Williams are scheduled to speak.
In Japan, Tokyo March CPI data will be released overnight, providing an early glimpse into the energy shock’s impact on Japanese consumer prices. February data on retail sales, unemployment, and industrial production will also be released, offering largely outdated insights.
Overnight, China will release NBS PMIs for manufacturing and services. NBS manufacturing PMI fell to 49.0 in February, but March signals from the Emerging Industries PMI and Yicai’s high-frequency indicator suggest a rebound, though the Iran war introduces some uncertainty.
During the week, we get key US labour market data with the JOLTS job openings, Challenger job cuts ahead of the main release, non-farm payrolls on Friday. In the euro zone, Flash CPI for March, released Tuesday, will be in focus.
Economic calendar
Middle East tensions have escalated sharply as Trump, in a Financial Times interview , suggested seizing Iran’s Kharg Island, which handles 90% of its oil exports, a potential shift from airstrikes to direct resource control. US ground deployment considerations significantly elevate tail risks, given Iran’s advanced missile and drone capabilities alongside the vulnerability of fixed assets. The Pentagon is also intensifying its presence, deploying approx. 10,000 troops trained for territorial operations. Amid these developments, Trump disclosed direct and indirect talks with Iran, describing its new leaders as “very reasonable,” even as Tehran warned against humiliation. Pakistan is preparing to mediate talks to end the month-long Iran war. Brent Crude rose to around 115 USD/bbl during early Asian trading.
In Norway , the seasonally adjusted unemployment rate stayed at 2.1% in March, slightly above Norges Bank’s forecast (2.0%) but unlikely to impact markets due to the minimal deviation. A marginal rise in unemployed persons suggests a slightly looser labour market. Retail sales fell 1.1% m/m in February, roughly as anticipated. Higher electricity bills may have dampened spending. Despite monthly volatility, retail activity has shown an upward trend since early 2025, supported by strong wage growth and easing mortgage rates.
In the euro area , Spanish HICP inflation rose to 3.3% y/y in March (below 3.8% consensus), with core inflation unchanged at 2.7%. Note that it is still early days in the impact of the war on the economy. Spain’s faster energy price passthrough and a high base effect contributed to the print. Hence euro area inflation expected to rise less than Spain on Tuesday, with consensus currently expecting a rise to 2.7% y/y from 1.9% y/y in February. A dovish signal for the ECB.
ECB’s Schnabel, typically a hawk, adopted a more dovish tone late Friday, emphasising caution. She stated the ECB “must be vigilant, but no need to rush” and should avoid overreacting to energy price shocks, highlighting the importance of assessing data for second-round effects and demand conditions. While this suggests she is not pushing for immediate hikes in April, her pre-war hawkish stance and optimism on the economic outlook indicate she may still align with the consensus, which appears tilted towards a hike.
In the US , the Final UMich 1-year inflation expectations were revised to 3.8% in March (prelim: 3.4%), reflecting rising gas prices. Long-term 5-year inflation expectations remained steady at 3.2%, suggesting anchored longer-term views.
Fed’s Barkin and Paulson, Barkin emphasised prudence in holding rates steady amid uncertainty, noting risks of stalled inflation progress even before the oil shock. He highlighted a fragile labour market with low unemployment but multiple applicants per job and limited wage pressure, consistent with current market pricing. Philly Fed’s Paulson echoed a cautious and balanced tone, highlighting that the Iran war poses risks to both growth and inflation.
Equities: Equities had a rough end to last week, extending the drop from Thursday by another 1.4%. S&P500 declined 1.7%, with Nasdaq down 2.2%, Russell 2000 -1.8% and Stoxx600 down 1%. Concerns over the growth implications for the continued rise in oil prices dominated discussions, in an almost textbook risk off session due to demand destruction concerns. Defensives, led by Energy companies being up 1.9%, outperformed cyclicals. Overnight, futures as well as Asian equities are down, amid the Houthi’s strike during the weekend.
FI and FX: The combination of energy prices taking another leg higher on renewed escalation risks in Iran and the fact that it increasingly looks likely that central banks will hike policy rates into a slowing economy sets the tone in FI and FX markets. After a nervous end to the last week cyclically sensitive assets are also opening in red territory this morning albeit FX spot moves have been fairly modest compared to recent Mondays. US yields are slightly lower this morning while precious metals are little changed from Friday’s close.
See also our in-depth FI and FX morning comment *
The Editorial – Who wants TACO? , 29 March
Weekly Focus – ECB on course for rate hikes , 27 March
Reading the Markets Sweden , 27 March
China Headlines – Profits jump higher ahead of war, Xi-Trump meeting set for mid-May , 27 March
Reading the Markets EUR – New call: two 25bp hikes in April and June , 27 March
Reading the Markets Norway – A hawkish ‘hold’; we expect 2 hikes in 2026 and 5 cuts in 2027-28, 26 March.
Reading the Markets Denmark – Winners and losers in the bond market , 26 March.
Riksbank Minutes – March 2026, 25 March.
Yield Outlook – Inflation concerns dominate, 24 March
Reading the Markets USD – War delays rate cuts , 24 March
Report completed: 30 March 2026, 07:00 CEST
Report first disseminated: 30 March 2026, 07:30 CEST
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