Investing.com – U.S. stocks were closed on Monday for a holiday.
Minutes from the Federal Reserve’s February meeting are set to take center stage this week as people are eager to know just how high rates will go in the central bank’s battle against inflation. On Friday, there will be data on US personal income and spending that will shed further light on the current pressure on US prices. On the other hand, U.S. stock retailers will also release their results, and people can learn from one side the real life conditions of consumers when prices soar.
In addition, the euro zone will also release purchasing managers’ index, and the speech of Japan’s new central bank governor is also closely watched.
Here are five major financial events you need to know about the coming week:
1. Fed moment
The Federal Reserve will release the minutes of the last FOMC meeting on Wednesday Eastern Time. After a year of sharp interest rate hikes, the Fed will slow down the pace of interest rate hikes to 25 basis points. Since then, a number of U.S. economic data have also shown that inflationary momentum in the country has paused.
However, in January, the U.S. producer price index (PPI) once again recorded its largest increase in seven months. Moreover, the U.S. employment report in January was also quite strong, and a series of data made investors worry that the Fed will increase interest rate hikes again in the future. Markets now expect the federal funds rate to top 5.2% in July, according to interest rate futures.
Meanwhile, the FOMC minutes may give investors some insight into whether the Fed is willing to hike rates more aggressively at its upcoming March meeting, after recent comments from some Fed officials hinted at a supportive stance for raising rates .
2. US economic data
The U.S. is due to release closely-watched U.S. and U.S. data on Friday, which will include the Fed’s favored measure of inflation – . Market participants expect PCE to rise 0.5% month-on-month, higher than 0.1% in December. January PCE growth is expected to rise 5% year-on-year, the same as in December. The core PCE is expected to rise 0.4 percent on a month-on-month basis, up from 0.3 percent in December, and 4.3 percent on a year-on-year basis, down slightly from 4.4 percent in December.
If the data is true, it will further confirm that the rise in inflation continues to weaken, prices stabilize, and the possibility that the Fed will continue to raise interest rates after June will fall. Last week, the increase in the U.S. consumer price index in January slowed down, but the increase in the producer price index was the highest in seven months, raising concerns about interest rate hikes, which is not good for the stock market.
Other economic data, there are,,, and so on.
Meanwhile, New York Fed President Williams will talk about inflation at an event on Wednesday.
3. Financial reports of retailers
The fourth-quarter earnings season is drawing to a close, and results from major retailers are on the way. Their data will shed light on whether consumers’ spending habits and intensity have changed amid soaring prices.
The world‘s largest retailer Walmart (NYSE: ) and home improvement giant Home Depot (NYSE: ) will report earnings on Tuesday “to give a head start to others,” according to retail industry analysts at JPMorgan. That’s followed by discount retailer TJX Companies (NYSE: ) on Wednesday.
“It is expected that Home Depot and Wal-Mart may be more cautious in their earnings outlook,” the analysts wrote in the report. They gave Wal-Mart a “neutral” rating and an “overweight” rating for Home Depot.
In addition to retailers, chip giant Nvidia (NASDAQ: ), manufacturer of the new crown vaccine Moderna (NASDAQ: ), e-commerce company eBay (NASDAQ: ), and China’s e-commerce giant Alibaba (BABA ), etc. earnings report in the coming week.
4. Euro zone economic data
Also to be watched on Tuesday will be data that will reflect whether Europe’s economy has sustained momentum after an unexpectedly strong performance last quarter. If the improvement in business conditions leads to higher price pressures, this could give the ECB the boost to keep raising rates given persistently high inflation.
Also not to be overlooked is Wednesday’s release of data that will show how the euro zone’s largest country fares amid the energy crisis – with analysts expecting signs of economic recovery to remain low.
Finally, the Eurozone has another release on Thursday that also needs to be watched closely.
5. Diet testimony of the new governor of the Bank of Japan
Kazuo Ueda, the incoming governor of the Bank of Japan, who is about to succeed Haruhiko Kuroda, attended a hearing in the Japanese Diet on Friday to explain his views on future monetary policy.
While Kazuo Ueda is dovish, investors expect his tenure to end his grip on the yield curve. Meanwhile, when will the Japanese bond market face the $8 trillion problem? It is also a matter of close attention to the market.
Regarding the above questions, the testimony of Kazuo Ueda should provide some clues.
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(Editor: Noreen Burke; Translator: Li Shanwen)