Macroeconomic & Geopolitical

Green Light to Fiscal Expansion

March 2021 – 3 min read
EU fiscal rules shouldn't restrain governments from spending what is necessary before economies recover. In the U.S., fiscal stimulus is boosting spending, particularly among lower-income consumers. Lastly, China PMIs showed temporary weakness.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • We watch for February inflation, particularly given the weather-induced surge in utility prices in Texas. While underlying inflationary pressures should not be cause for concern, any upside surprise would likely lead to a market reaction.
  • Consumer sentiment has remained depressed since the crisis began. However, we will watch the extent of improvement in March as stimulus is disbursed, additional aid looks set to pass, vaccine news improves, and some restrictions ease.


  • The ECB Meeting scheduled for Thursday is expected to show how the central bank’s reaction to rising interest rates plays out within the Governing Council. President Christine Lagarde will likely build a consensus around a very supportive policy, as the ECB is focused on maintaining financial conditions favorable for European economies still waiting to fully reopen.

Asia Pacific

  • China inflation is expected to remain muted in February. Commodity prices may push the Producer Price Index higher, but falling food prices and the weaker February services PMI suggest the Consumer Price Index should remain in deflationary territory.
  • Eyes are on Japan’s final estimate of 4Q20 GDP, given risks of downward revisions due to weaker demand-side capex data.

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