This week will be shorter for financial markets due to the Easter holidays in Europe and the US, reports Euronews. While risk-averse attitudes may continue to influence global market movements, key economic data, including purchasing managers' indices (PMIs) in industry and services, and earnings of major companies are expected to play a crucial role in shaping future market trends.

On Wednesday, S&P Global is expected to release its April manufacturing and services PMIs for major economies. These indexes measure business activity based on new orders, employment and confidence. A reading above 50 indicates growth, while a value below 50 signals contraction.

Europe

In March, the eurozone manufacturing PMI improved to 48.6 points from 47.6 points in February, marking the weakest contraction since January 2023. Germany and France saw significant improvements in manufacturing activity. Germany's PMI rose to 48.3 from 46.5, the highest since August 2022, while France's reading reached 48.5, reflecting the softest decline in over two years. However, "concerns about geopolitical uncertainty and client spending kept optimism in check," S&P Global said in the report.

Consensus forecasts suggest that business activity could slow in April due to tariff-related economic uncertainty. The eurozone manufacturing PMI is expected to fall to 47.4, with Germany and France forecast to report 47.5 and 47.9 respectively.

The euro area services PMI expanded for a fourth consecutive month in March, with a reading of 51.0, up from 50.6 in February. Germany's services PMI index also expanded for the fourth consecutive month at 50.9 points. However, the pace of growth slowed as new business declined at the fastest pace in six months amid weak demand and heightened uncertainty. Optimism persisted thanks to fiscal expansion in Germany, new product launches and technological advances. In contrast, the services sector in France contracted for the seventh consecutive month, reflecting continued weak demand.

Consensus forecasts point to further, albeit weaker, growth in April. The euro area services PMI is forecast at 50.4 points, with Germany and France expected to report 50.3 and 47.6 points respectively.

In addition, on Thursday (24.04) the Ifo index of the business climate in Germany, a leading indicator of the state of the economy, is expected to be announced. The index rose to 86.7 in March, the highest level since July 2023, supported by historic debt reforms that unlocked billions in defence and infrastructure funding. However, the index is expected to fall this month, possibly due to the impact of Trump's newly announced tariffs.

United Kingdom

In the UK, the S&P Global manufacturing PMI fell to 44.9 in March, extending its decline for the sixth consecutive month and marking its lowest reading in 17 months. Business confidence fell to a two-and-a-half year low amid expectations of tighter fiscal policy, uncertainty over tariffs and geopolitical tensions. The indicator for April is forecast to fall further to 44.0 points.

In the services sector, the index was revised up to 52.5 points in March from a preliminary estimate of 53.2 points, the highest since August 2024. However, tight household budgets and geopolitical tensions are expected to continue to weigh on business sentiment. The services PMI is expected to fall to 51.4 points in April.

United States

In the US, the manufacturing PMI fell sharply to 50.2 in March from 52.7 in February. The decline was mainly due to a pullback from the front-month increase in manufacturing in February. However, business confidence weakened to its lowest level since December 2024 amid uncertainty over government policies.

In contrast, the services PMI rose to 54.4 in March, its highest level since 2025. Despite the strong reading, business optimism declined, weighed down by concerns about tariff-related disruptions and federal spending-cut initiatives. Analysts expect manufacturing to return to contraction in April with a projected reading of 49.3, while the services index is expected to fall to 52.9.

Big tech gains in focus

Crucially, this week will also see the release of first quarter earnings reports from major US technology companies including Tesla, Microsoft and Alphabet. Shares of these companies, particularly Tesla, have come under pressure amid concerns that Trump's tariffs could disrupt supply chains and key international markets.

Analysts expect Tesla's first-quarter revenue to grow 2.6% year-over-year. However, earnings per share are projected to decline due to plant retooling for the new Model Y SUVs and slowing sales due to Ilon's political interference. | BGNES