The Davy Digest - 30th March 2026

Equity markets in the US finished lower for the fifth consecutive week, marking their most prolonged losing streak since 2022. Negotiations in the Middle East appeared to be progressing as the US proposed a 15-point peace plan to Iran, while Trump postponed planned strikes on critical energy infrastructure in the region.

On the data front, preliminary estimates from the S&P Global Purchasing Managers’ Index (PMI) survey for March were released in the US and Europe. In the US, the composite index fell to an 11-month low of 51.4 – below market consensus – as improving manufacturing activity was offset by weakness in the services sector. In the United Kingdom, the February inflation reading was published. Prices rose by 3% compared to 12 months prior, in line with expectations. In addition, UK retail sales figures were updated, showing a 2.5% decrease year-on-year.

Last week's highlights

	S&P Global Manufacturing PMIs (24/03) – Composite decreased to 51.4, below expectations Michigan Consumer Sentiment (27/03) – Sentiment revised down to 53.3 (vs 54.0 expected)
	S&P Eurozone Composite PMI (24/03) – Preliminary estimate for March at 50.5 (vs 51.0 expected)
	UK Inflation (25/03) – Inflation unchanged at 3.0% YoY, in line with expectations UK Retail Sales (27/03) – Fell to 2.5% YoY, ahead of consensus
	Australia Inflation (25/03) – Slowed to 3.7% YoY, lower than expected

What's on the radar

	February JOLTS (31/03) Retail Sales (01/04) Nonfarm Payrolls and Unemployment (03/04)
	Eurozone March Inflation Preliminary Estimate (31/03)
	Q4 Gross Domestic Product Final Estimate (31/03)
	China Manufacturing PMI (31/03) Tokyo Inflation (31/03)

Chart of the moment - Stay invested

Source: Bloomberg as of 20/03/2026

• Since the onset of conflict in the Middle East, markets have reset their expectations for interest rates moves this year, as energy prices have surged higher.  
• Markets are now pricing almost 3 rate hikes from the European Central Bank (ECB) this year and are not expecting much movement from the Federal Reserve (Fed). 
• Historically, central banks have tried to look through energy shocks, but they can only do so if inflation expectations remain anchored. 
• The ECB are determined to avoid a repeat of 2022, when they underestimated the persistence of energy driven inflation, but they will need to be careful not to derail the economy in the process.