Weekly Market Outlook (March 24th – March 28th)

Gold set three record highs in five trading days last week, capturing market attention as demand for safe-haven assets continued to drive its rally. However, some profit-taking led to a pullback toward the end of the week.

Meanwhile, the Federal Reserve’s meeting reaffirmed its openness to rate cuts later in 2025 but maintained a cautious stance due to lingering inflationary pressures and economic growth uncertainties reflected in its latest projections.

Week Ahead: Inflation and Economic Growth in Focus

With major central banks highlighting economic uncertainty last week, market attention now shifts to upcoming inflation data.

Key releases include the UK Consumer Price Index (CPI) on Thursday, followed by the U.S. Core PCE Inflation and Japan’s Tokyo CPI on Friday. These reports will provide further insights into inflation trends and their potential impact on monetary policy decisions.

UK Consumer & Producer Price Index (March 26th)

The recent uptick in UK inflation has raised concerns within the Bank of England (BoE), as highlighted in its latest statement. With CPI climbing to a one-year high of 3%, the BoE has ruled out the possibility of rate cuts in Q2 2025.

Markets will closely watch the upcoming inflation data to determine whether price pressures remain elevated, which could further delay any policy easing from the central bank.

US PCE Price Index (March 28th)

In the March Federal Reserve Summary of Economic Projections, the Fed raised its headline PCE inflation forecast to 2.8%. While policymakers still anticipate two rate cuts later in 2025, they require more concrete evidence of inflation easing before taking action.

This week’s PCE inflation data will be a key indicator for markets, offering insight into whether inflation is cooling enough to support the Fed’s projected rate cuts.

Japan Tokyo CPI (March 28th)

Japan’s annual inflation rate eased to 3.7% in February 2025, down from a two-year high of 4.0% in January, temporarily cooling market expectations for a more hawkish Bank of Japan (BoJ) stance. The upcoming Tokyo CPI, a key leading indicator of nationwide inflation, will provide further insight into Japan’s inflationary trend and could influence the BoJ’s policy outlook.