Key events to watch in the week ahead: 3 – 9 March 2025

This week’s overview

US tech sell-off remains the theme this week, as market participants rotated out of expensive growth stocks into areas of value. Despite a strong set of results, NVIDIA failed to sustain its initial gains, closing 8.5% lower post-earnings. A confluence of factors have fuelled the broad risk-off move, including weaker US economic data raising growth concerns, market repricing for potential tariff risks following renewed threats from President Trump, and historically weak market seasonality.

Heading into the new week, here are four key events to watch.

5 March 2025 (Wednesday, 8.30am SGT): Australia’s Q4 gross domestic product (GDP)

Australia’s GDP increased by 0.3% in the September quarter of 2024 for an annual rate of 0.8%. The primary drivers of GDP growth were government spending and public capital investment. That said, per capita GDP growth decreased by 0.3% quarter-on-quarter (QoQ), marking the seventh straight quarterly decline and the longest recorded stretch of negative growth, deepening the "per capita recession".

As we await the final partial components for next week’s GDP print, the preliminary forecast is for a rise of 0.7% QoQ, lifting the annual growth rate to 1.3%. Ahead of the data, the Australian interest rate market is pricing in a full 25 basis points (bp) Reserve Bank of Australia (RBA) rate cut by July and a total of 53 bp of RBA rate cuts for the remainder of 2025.

6 March 2025 (Thursday, 9.15pm SGT): European Central Bank (ECB) interest rate decision

At its previous meeting, the ECB signalled a clear intent for lower rates, expressing confidence in the disinflation process, acknowledging near-term economic weakness and maintaining that monetary policy remains restrictive.

As a result, a 25 bp rate cut from the ECB is widely seen as a done deal next week, with its deposit facility rate likely to be reduced to 2.5% from the current 2.75%. This would mark the fifth consecutive rate cut, with headline inflation holding just above 2% and core inflation stabilising at its lowest level since early 2022 (2.7%). A further 25 bps cut is being priced at the April meeting as well, with the rationale rooted in policymakers’ shifting focus towards fostering growth, given short-term economic risks.

That said, market expectations are still split regarding the pace and extent of future rates for the latter half of the year, making the upcoming press conference crucial in guiding future expectations. Policymakers may have to address the prospects of increased defense spending as a potential boost to growth, which may reduce the urgency for aggressive easing ahead.

7 March 2025 (Friday, 9.30pm SGT): US non-farm payrolls report

The non-farm payrolls report for January was mixed. Job additions increased by just 143,000 in January, falling short of the 175,000 expected. The BLS indicated that weather and wildfires "had no discernible effect on national payroll employment, hours, and earnings".

Despite the headline miss, other parts of the report highlighted a strong labour market, with 100,000 of upward revisions over the past two months and an unexpected drop in the unemployment rate to 4.0% from 4.1%.

After rising steadily in the first quarter of 2024, the US unemployment rate has remained between 4.0% and 4.2% for the past 9 months, supporting the Federal Reserve (Fed)’s recent observation.

Ahead, the preliminary expectation for February is that the US economy will add 180k jobs and that the unemployment rate will remain at 4.0%. This outcome would help reinforce current market pricing that the Fed will keep rates on hold until mid-year, before delivering two 25 bp rate cuts in the second half of 2025.

9 March 2025 (Sunday, 9.30am SGT): China’s inflation rate

In January, China’s consumer inflation rose to a five-month high of 0.5% year-on-year, surpassing the 0.4% consensus, while producer prices remained flat at a 2.4% year-on-year (YoY) contraction. Seasonal factors, including the Lunar New Year, likely contributed to the short-term demand boost, which will leave eyes on the upcoming inflation data to provide a clearer picture of the underlying consumer price trend.

Some cooling off in price momentum is expected following the festive period, with low consumer confidence and ongoing concerns about employment and wages within the Chinese economy potentially still a drag on domestic demand.

Expectations are for China’s consumer price index (CPI) to soften to 0.1%, while producer prices are anticipated to stay in contraction at -2.0%, underscoring ongoing deflationary pressures and the need for further accommodative policy measures. Focus will be on the upcoming ‘Two Sessions’ meeting, where authorities are expected to maintain this year’s GDP growth target of “around 5%,” with prospects for additional reserve requirement ratio (RRR) and interest rate cuts.