Data comes back into focus after a busy week
Last week’s FOMC meeting was the biggest focus for the week and caused some very erratic price action. With the language changing in the statement it now means that next move from the Fed is going to be very data dependent. In the UK, the direction of the next move in interest rates came under scrutiny after BoE member Haldane stated that the next step could result in a possible rate cut.
A fairly quiet start to the week with much of the attention on ECB President Draghi; who is due to testify on monetary policy before the European Parliament's Economic and Monetary Affairs Committee in Brussels.
- ECB President Draghi speaks
- US Existing Home Sales
By far the most important figure from the UK is on Tuesday with the release of the inflation reading. Last week BoE member and chief economist Haldane stated that the central bank must ensure it "stands ready” to cut interest rates if the economy falls into a prolonged period of deflation. The inflation reading is expected to slide to an anemic 0.1%. If this falls into the negative, Sterling will slide as the market starts to ponder the probability of a rate cut.
- Eurozone Manufacturing
- Eurozone Services
- UK Inflation
- US Inflation
Given the recent slide in the Euro’s strength and the ongoing tension between Germany and Greece, business sentiment will be an important gauge as to the performance of the region. From the US, the durable goods data will give the market an idea of the confidence in the consumer appetite.
- German IFO
- UK Mortgage Approvals
- US Durable Goods
In the UK consumer spending makes up between 70-80% of the nation’s GDP retail sales therefore it is always important to keep an eye on the UK retail sales. Data from the UK has been soft recently, raising question marks about the strength of the recovery.
- UK Retail Sales
- US Weekly Jobless Claims
Friday’s focus will be on the speaking engagements from various public figures from central banks. Given the uncertainty in the market the rhetoric released will be deciphered from clues on future policy. Meanwhile the US GDP is expected to be revised upwards.
- BoE Gov. Carney due to speak
- US GDP
- FOMC Chair Yellen due to speak