Economic Weekly Wrap
16 Mar 2026 - 20 Mar 2026

Continued hostilities in West Asia weighed on investor sentiments and the impact was visible on the movement in global asset classes. Supply side disruptions kept oil prices above the US$ 100/bbl mark, raising concerns over global growth and inflation outlook. Against this backdrop, central bank meetings in US, Japan, UK, EU and Australia will be keenly awaited.

Elsewhere, US GDP growth for Q4 2025 was revised down to 0.7% from 1.4% earlier. Core-PCE rose by 0.4% in Jan’26, unchanged from last month. Labour market conditions remained stable with JOLTS job openings rising by 396,000 in Jan’26. In China, industrial production rose by 6.3% in Jan-Feb’26, after rising by 5.2% in Dec’25. Retail sales increased by 2.8% compared with 0.9% earlier, while fixed assets growth rose by 1.8%.

Global stock indices ended in red as investors weighed the impact of higher oil prices. US stocks declined as GDP growth for Q4 2025 was revised sharply downwards. Shanghai Comp also declined despite stronger exports. In India, Sensex dipped by 1.9% led by losses in metal and auto stocks, though it is trading higher today.

Table 1 – Stock Markets

Source: Bloomberg, Bank of Baroda Research

Global currencies depreciated. DXY rose by 0.6% to a near 10-month high on safe-haven demand. GBP declined by 0.8% as UK GDP stagnated. INR dipped to a record low due to higher oil prices and FPI outflows.

Table 2 – Currencies

Source: Bloomberg, Bank of Baroda Research

Global yields continued to inch up. Japan’s 10Y yield rose the most by 7bps due to inflation concerns from higher oil prices. UK and US yields also increased. India’s 10Y yield rose by 1bps.

Table 3 – Bond 10Y Yield

Table 4 – Short Term Rates

Table 5 – Liquidity

Table 6 – Capital Market Flows

Oil prices continued to hover above the US$ 100/bbl mark due to supply disruption concerns.

Table 7 – Commodities

Source: Bloomberg, Bank of Baroda Research

Global markets traded cautiously as investors continued to monitor developments in West Asia. Going ahead, oil prices are likely to remain in focus, as key central banks meet this week. While most global central banks are expected to hold rates steady, investors will likely keep a close watch on the assessment of growth and inflation outlook against the backdrop of the current geo-political situation. However, Reserve Bank of Australia continued to tighten its monetary policy and raised the cash rate by 25bps to 4.1%. This is the second consecutive rate hike by the RBA as it attempts to keep inflation within its target range. In India, merchandise trade deficit widened to US$ 27.1bn in Feb’26 compared with US$ 14.4bn in Feb’25. Exports declined by 0.8% in Feb’26, while imports recorded a growth of 24.1% in the same period.

Global stock indices showed a cautious recovery, except in China and Japan. Focus remains on oil price movement and central bank meetings. US stocks rose led by gains in AI-related stocks. In India, Sensex rose by 1.3% driven by auto and banking stocks, though it is trading lower today while other Asian markets are mostly higher.

Table 1 – Stock Markets

Source: Bloomberg, Bank of Baroda Research

Global currencies appreciated as the dollar rally stalled. DXY dipped by 0.6% tracking a fall in US treasury yields. EUR rose the most by 0.8%, followed by GBP at 0.7%. INR remained largely unchanged and is trading flat today, while other Asian currencies are mixed.

Table 2 – Currencies

Source: Bloomberg, Bank of Baroda Research

Global yields ended mixed. Yields in the US, UK and Germany declined, while Asian yields edged higher. US 10Y yield fell the most by 6bps. India’s 10Y yield rose by 2bps and is trading higher today.

Table 3 – Bond 10Y Yield

Table 4 – Short Term Rates

Table 5 – Liquidity

Table 6 – Capital Market Flows

Oil prices eased as IEA hinted at further release of strategic reserves.

Table 7 – Commodities

Source: Bloomberg, Bank of Baroda Research

Investors’ focus has turned to central bank meetings even as tensions in West Asia have remained elevated. Oil prices continue to trade above the US$ 100/bbl, as shipping through the Strait of Hormuz remains effectively at a standstill. On the macro front, ZEW economic sentiment index for Germany declined sharply to (-) 0.5 in Mar’26 (est. 39) from 58.3 in Feb’26. The fall was attributed to heightened uncertainty due to geo-political tensions. In the US, pending home sales increased by 1.8% in Feb’26 on a MoM basis, due to a decline in mortgage rates. Separately, Japan’s exports increased by 4.2% in Feb’26, after increasing by 16.8% in Jan’26. The slowdown was attributed to decline in exports to US and China. On the other hand, imports increased 10.2% in Feb’26, reversing a fall of 2.6% in Jan’26.

Global stock indices ended mostly higher, except in China and Japan. Markets recovered despite rising oil prices. US gains were driven by airlines and travel stocks, while FTSE also rose ahead of BoE commentary. In India, Sensex rose by 0.8% led by gains in metal and auto stocks and is trading higher today in line with other Asian markets.

Table 1 – Stock Markets

Source: Bloomberg, Bank of Baroda Research

Global currencies broadly appreciated against the US dollar. DXY weakened ahead of the Fed’s policy decision. EUR rose by 0.3% despite weak German sentiment data, while INR appreciated marginally but is trading weaker today in line with other Asian currencies.

Table 2 – Currencies

Source: Bloomberg, Bank of Baroda Research

Global bond yields mostly declined, except in Japan and India. Yields in US, UK, and Germany softened ahead of central bank policy decisions. India’s 10Y yield rose marginally by 1bps and is trading at similar levels today.

Table 3 – Bond 10Y Yield

Table 4 – Short Term Rates

Table 5 – Liquidity

Table 6 – Capital Market Flows

Oil prices rose by over 3% as investors monitored developments in the Middle East.

Table 7 – Commodities

Source: Bloomberg, Bank of Baroda Research

Continued hostilities in West Asia weighed on investor sentiments and the impact was visible on global asset classes. Supply-side disruptions kept oil prices above the US$ 100/bbl mark, raising concerns over global growth and inflation outlook. Against this backdrop, central bank meetings in the US, Japan, UK, EU, and Australia will be keenly awaited.

US GDP growth for Q4 2025 was revised down to 0.7% from 1.4% earlier. Core-PCE rose by 0.4% in Jan’26, unchanged from last month. Labour market conditions remained stable with JOLTS job openings rising by 396,000 in Jan’26. In China, industrial production rose by 6.3% in Jan-Feb’26, while retail sales increased by 2.8% and fixed asset growth rose by 1.8%.

Global stock indices ended in red as investors weighed the impact of higher oil prices. US stocks declined, while Shanghai Comp also fell despite strong exports. Sensex dipped by 1.9%, led by losses in metal and auto stocks, though it is trading higher today.

Table 1 – Stock Markets

Source: Bloomberg, Bank of Baroda Research

Global currencies depreciated with DXY rising by 0.6% to a near 10-month high on safe-haven demand. GBP declined as UK GDP stagnated, while INR hit a record low due to high oil prices and FPI outflows.

Table 2 – Currencies

Source: Bloomberg, Bank of Baroda Research

Global yields continued to rise amid inflation concerns. Japan’s 10Y yield rose the most, followed by UK and US. India’s 10Y yield also increased slightly and is trading higher.

Table 3 – Bond 10Y Yield

Table 4 – Short Term Rates

Table 5 – Liquidity

Table 6 – Capital Market Flows

Oil prices remained elevated above US$ 100/bbl due to supply disruption concerns.

Table 7 – Commodities

Source: Bloomberg, Bank of Baroda Research