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French consumer spending fell 1.4% month-on-month in February, much weaker than the -0.3% forecast and reversing the 0.4% increase previously. The data indicates a marked pullback in household demand at the start of the year, pointing to softer consumption momentum in the near term.

Possible Market Effect: The weak spending figure may weigh modestly on sentiment toward French domestic-demand sectors.

Source: INSEE.

France’s preliminary March inflation data showed a clear pickup in consumer prices. CPI rose 0.9% month-on-month, matching the 0.9% forecast and accelerating from 0.6% previously. On an annual basis, CPI increased 1.7%, above the 1.6% forecast and up from 0.9% previously. The harmonized measure also strengthened, with HICP rising 1.1% month-on-month from 0.7% previously and 1.9% year-on-year, matching the 1.9% forecast and rising from 1.1%. The data points to firmer consumer-price momentum in March, with both national and harmonized inflation measures moving higher.

Possible Market Effect: The stronger inflation print may modestly support euro area yields and could slightly reduce near-term expectations for faster policy easing.

Source: INSEE.

Germany’s import price index rose 0.3% month-on-month in February, below the 0.7% forecast and slower than 1.1% previously. On a yearly basis, import prices fell 2.3%, unchanged from the -2.3% previous reading. The figures suggest monthly import cost pressures eased more than expected, while the annual rate remained firmly negative.

Importance: Medium

Source: Federal Statistical Office of Germany (Destatis).

German retail sales fell 0.6% month-on-month in February, missing the 0.3% forecast, although the decline was smaller than the -1.1% previous reading. On a yearly basis, retail sales rose 0.7%, below the 1.0% forecast and weaker than 0.9% previously. The data points to still-soft consumer demand, with both monthly and annual performance coming in below expectations.

Importance: Medium

Possible Market Effect: Weak retail sales can reinforce a cautious view on German domestic demand and may modestly weigh on euro area growth sentiment.

Source: Federal Statistical Office of Germany (Destatis).

European equities rallied on Monday, with the FTSE 100 up 1.61%, the DAX gaining 1.18%, the CAC 40 rising 0.92%, and the Euro Stoxx 50 adding 0.70%, as investors responded to signs of diplomatic progress even while oil prices continued to move higher. The move suggested that markets were willing to price in some near-term relief after President Donald Trump said “great progress” had been made in negotiations to end the war, although he also repeated threats to strike Iranian power plants if talks fail and the Strait of Hormuz is not reopened. Europe’s broader market tone was therefore stronger, but still cautious rather than fully risk-on.

The rebound in European shares came even as the conflict involving the U.S., Israel, and Iran continued to pressure global energy markets. Reuters reported that European stocks started the week firmer, but Middle East escalation fears and higher oil prices continued to cap confidence, especially for energy-sensitive economies and sectors.

Possible market effect: If ceasefire hopes keep building, European equities could extend gains, especially in cyclical sectors. But if oil keeps rising or diplomacy fails, inflation concerns may quickly return and limit upside for stocks.

Source: FTSE Russell; Euronext; Deutsche Börse; STOXX; SIX Swiss Exchange; Reuters.

France’s latest BTF auctions showed short-term sovereign yields remained relatively firm. The 12-month BTF yield rose to 2.660% from 2.585%, the 3-month yield edged up to 2.238% from 2.226%, while the 6-month yield was broadly stable at 2.407% versus 2.412% previously. The results suggest French short-term funding costs stayed elevated, with only limited easing across maturities.

Importance: Low

Source: Agence France Trésor (AFT).

Germany’s preliminary March inflation figures showed a renewed pickup in price pressures. CPI rose 1.1% month-on-month and 2.7% year-on-year, compared with 0.2% monthly and 1.9% annual previously. At the same time, HICP increased 1.2% month-on-month and 2.8% year-on-year, up from 0.4% monthly and 2.0% annual before. The figures suggest inflation momentum strengthened again in Europe’s largest economy, reinforcing attention on the euro area inflation path.

Importance: Medium

Source: Federal Statistical Office of Germany (Destatis).

Euro area survey data for March showed a mixed but slightly steadier picture. The Business and Consumer Survey rose to 96.6, a touch above the 96.5 forecast, though still below the 98.2 previously. Industrial sentiment improved to -7.0 from -7.2 and beat the -9.0 forecast, while services sentiment edged up to 4.9, slightly below the prior 5.0 but above the 4.0 forecast. Business climate improved to -0.27 from -0.36, and consumer confidence held unchanged at -16.3. The more notable shift came from pricing signals, with selling price expectations rising to 19.7 from 12.3 and consumer inflation expectations jumping to 43.4 from 26.2. This suggests the broader sentiment picture may be stabilizing somewhat, but inflation perceptions and pricing intentions remain under upward pressure.

Importance: Low

Source: European Commission, DG ECFIN Business and Consumer Surveys.

Italy’s producer prices weakened further in February, with PPI falling 0.4% month-on-month after a 1.5% rise previously, while the annual rate dropped 2.7% from -1.6%. The combination points to softer pipeline price pressures in the industrial sector, suggesting that producer-level inflation remained firmly subdued and even moved deeper into negative territory on a yearly basis.

Importance: Low

Source: Istituto Nazionale di Statistica (ISTAT).

Spain’s retail sales rose 2.2% YoY in February, missing the 3.8% forecast and slowing from the previous 3.8% pace. The softer reading suggests consumer spending remained positive, but the pace of demand growth eased compared with earlier momentum.

Importance: Low

Source: National Statistics Institute of Spain (INE).

Switzerland’s KOF Leading Indicator fell to 96.1 in March, below the 101.1 forecast and down from 103.8 previously. The sharp decline points to weakening forward-looking momentum in the Swiss economy and suggests growth conditions may be softening more clearly heading into the coming months.

Importance: Medium

Source: KOF Swiss Economic Institute.

French Interior Minister Laurent Nuñez said there is strong suspicion that the failed attack outside a Bank of America building in Paris was linked to Iran, according to current media reporting. French authorities have opened a terrorism investigation after police stopped a suspect who was allegedly trying to ignite an improvised explosive or incendiary device outside the bank; one suspect was detained, and another escaped.

The case adds to rising security concerns in France as the regional conflict spills into Europe’s threat environment. French officials have already increased protection around U.S.-linked sites and other potentially sensitive locations, while investigators are now examining the attempted attack under terrorism-related charges.

Source: AP; Wall Street Journal live coverage.