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ECB set for hawkish pivot

The ECB’s March meeting promises to be the most interesting in a while with the ‘good place’ on interest rates challenged by the energy shock. The cut off date for the projections was most likely just before the war, so the energy shock will only be very modestly included. However, the ECB will also likely present scenarios that better capture recent developments, which will indicate that they may need to act. In addition, we expect the general tone of the communication to be a lot more hawkish. Uncertainty on the conflict is high, but if the current situation persists through to the April meeting, a hike becomes a distinct possibility

Carbon Market Strategist-Supply uncertainty and weaker demand reshape carbon market outlook

EUA prices peaked early 2026, then fell back as sentiment weakened and intervention possibility increased. Tighter LNG markets revived fuel switching dynamics, but impacts are expected to be smaller than in 2022. Traders reduced long positions and increased shorts as bullish sentiment faded. Rising geopolitical uncertainty reduces allowance demand expectations from main sectors. CBAM entered its definitive phase; upcoming EU ETS/MSR reforms increased near term supply uncertainty. We revised 2026 outlook downward, though price recovery is still expected later in the year.

The Week Ahead: 16-20 March 2026

These are the key macro events for the upcoming week.

China Macro Watch - On Iran, Trump-Xi, NPC and bullish data

China and the Middle East conflict: Impact cushioned. The coming Trump-Xi meeting: Safeguarding the fragile equilibrium. Key take-aways from the annual March political/policy sessions. Recent macro data have turned more ‘bullish’.

Podcast - Talking Macro: Is Europe heading for a new energy crisis?

In this episode, Bill speaks with Senior Energy Economist Moutaz Altaghlibi about how the Iran conflict is affecting global energy markets, and whether Europe faces the risk of a new energy crisis.

Macro scenarios of the Iran conflict

The conflict in between the US-Israel and Iran has entered its 11th day. Geopolitical risk, as measured by the GPR index, has spiked to levels last seen around the Iraq invasion in 2003, and has remained highly elevated since. Since our initial publication last week Monday, it has been a rollercoaster ride for both oil and gas markets [1]. Given the ongoing uncertainty around the duration and impact of the conflict, we have put together three scenarios exploring how the macro-economic impact could evolve over the coming months, focused on the US and eurozone, and with the implications for the ECB and Fed’s key policy rates. We will follow up this note with updates on how we see these scenarios impacting bond and FX markets in the coming days.

The Week Ahead: 9-13 March 2026

These are the key macro events for the upcoming week.

What a prolonged LNG supply shock could mean for gas prices and inflation

First signs of Germany’s fiscal spending spree

Defence spending is surging, according to monthly government spending data. The spending jump is now visible in factory order data, with the recent strength driven primarily by weapons and aircraft orders. Defence spending is likely to provide a cyclical tailwind to industry. But it will not be a saviour by itself given structural headwinds. A key uncertainty remains how quickly spare capacity in German industry can retool to new sources of demand.

Improving outlook for Dutch industry

The Nevi Dutch Manufacturing PMI has risen, from 50.1 to 50.8, indicating a clear improvement in conditions. Production in the Dutch manufacturing sector picked up faster in February. The volume of new orders fell slightly, but international conditions have further improved.