Week Ahead – Flash PMIs to bring recession risks to the forefront, SNB meets
XM Group | Mar 18, 2022 10:16AM ET
Will Eurozone PMIs flag a slowdown?
The fallout from the Ukraine conflict has had far-reaching consequences on global markets and on the economic outlook as the world has slipped into a new crisis just as it was emerging from another one. But the most startling impact has been on inflation, as the sanctions against commodity-rich Russia have inflamed already boiling price pressures.
With everything from energy, agricultural and metal commodities shooting higher since Russia invaded Ukraine, the squeeze on businesses and consumers has tightened even more, sparking fears of a recession. Europe is at a greater risk from suffering another downturn as it has become too dependent on Russian oil and gas for meeting its energy needs over the years.
European exporters will additionally have to bear the consequences of the tough Western sanctions, and combined with soaring input costs, business confidence has already started to dip. This puts all the more focus on Thursday’s flash PMI numbers for the euro area for March as investors will want to see whether the geopolitical turmoil on the European Union’s doorstep is denting economic activity.
Should the efforts for a ceasefire between Russia and Ukraine falter, the dollar could resume its uptrend, pressuring its main rivals, the euro and pound.
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