Key events to watch in the week ahead: 31 March – 4 April 2025

This week’s overview

The corrective bounce across major US indices was cut short by fresh tariff headlines from President Trump, who announced the implementation of his long-promised tariffs of up to 25% on automotive imports. While the prospect of auto tariffs had been previously floated, the accelerated timeline and limited room for negotiation may catch some by surprise. The headlines sparked a swift risk-off reaction, prompting an initial selloff in risk assets, while safe-haven gold once again benefited from the renewed trade uncertainties.

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

31 March 2025 (Monday, 9.30am SGT): China’s National Bureau of Statistics (NBS) manufacturing and services Purchasing Managers' Index (PMI)

China’s official PMI readings indicate some stability in February, with manufacturing activity returning to expansion at 50.2 (up from 49.1) and services activity edging higher to 50.4 (from 50.2). This improvement likely reflects the post-Lunar New Year resumption of economic activity, along with the impact of government stimulus measures.

That said, China's economy remains fragile, amid persistent deflationary risks, ongoing challenges in the property sector, and labour market pressures. The upcoming PMI release will be closely watched for insights into the recovery’s momentum, while market participants will also be closely eyeing any potential impact of upcoming reciprocal US tariffs on China’s growth outlook.

For now, further improvement in the PMI read is expected in March, with official manufacturing PMI projected to rise to 50.5. The Caixin PMI, which focuses more on private-sector activity, is also anticipated to strengthen, with manufacturing expected to improve to 51.2 from 50.8.

1 April 2025 (Tuesday, 11.30am SGT): Reserve Bank of Australia (RBA) interest rate decision

At its February meeting, the RBA cut rates by 25 basis points (bp), marking its first reduction since the early days of the Covid-19 pandemic. However, the central bank has adopted a more cautious stance on further easing, at least for now. Inflation risks remain a concern, with the latest meeting minutes indicating that the RBA board is “not yet assured” that inflation can return to target with a lower cash rate. Policymakers also signalled that last month’s rate cut should not be interpreted as a commitment to further reductions and downplayed the likelihood of multiple cuts.

Looking ahead, the RBA is widely expected to keep rates unchanged in April to assess the impact of the February cut and gain more clarity on the effects of US tariffs. However, rate cuts are still anticipated to resume in May, pointing to a more measured easing cycle that hinges on greater confidence in the disinflation progress.

1 April 2025 (Tuesday, 5pm SGT): Eurozone’s flash consumer price index (CPI)

For February, Eurozone’s headline consumer inflation eased to 2.3% from the 2.5% prior, reflecting its first moderation in five months. Core inflation eased as well, down to 2.6% from the 2.7% prior. The reading were still higher than what markets expect, with price pressures evident in key components such as services, food, alcohol and tobacco – highlighting some last-mile challenge in bringing inflation down to the European Central Bank (ECB)'s 2% target.

Following a 25 bp rate cut in early March, markets widely anticipate another 25-bp reduction to 2.25% at the ECB’s April meeting. However, the outlook for June remains uncertain, with expectations split between further cuts and a pause. Ahead, further disinflation progress, especially in the core aspect, may offer policymakers the reassurances to proceed with further cuts to support growth, though they will likely be keeping a close eye on broader macro risks as well, particularly around US tariffs and Russia-Ukraine conflict resolution.

4 April 2025 (Friday, 11.30pm SGT): US non-farm payrolls

For February 2025, the US economy added 151,000 jobs, while the unemployment rate edged up to 4.1%. Job gains were concentrated in healthcare, financial activities, transportation, warehousing, and social assistance, whereas federal government employment declined by 10,000 positions. This suggests a gradual cooling in the labour market amid tariff uncertainties and widespread federal layoffs.

Amid rising recession fears linked to US tariffs, a weaker-than-expected jobs report could heighten economic concerns. Further labour market softening is anticipated, with payroll growth projected to slow to 128,000 in March, down from 151,000 in February. The unemployment rate is expected to rise slightly to 4.2%.