Interest rate decisions will attract attention next week

Interest rate decisions will attract attention next week

Sunday, March 14, 2021 12:52 PM

(ABM FN-Dow Jones) In the coming week, mainly central banks, including the Federal Reserve, will attract investor attention. Earning season is now coming to an end.

We start the macroeconomic week with the industrial production number from China. Japan will follow on Tuesday, and so will the United States.

The trade balance from Belgium will also be published on Monday. The Japanese Trade Balance is due for release on Wednesday, and the European Balance for Thursday.

France is providing insight into the evolution of consumer prices on Tuesday, and the entire euro zone will release an inflation figure on Wednesday. Japan will follow on Friday.

Inflation numbers remain important to the market, given the fear of rising interest rates. European Central Bank President Christine Lagarde warned last week in the ECB’s interest rate decision that inflation in the Eurozone will rise in the coming months and fluctuate.

On Tuesday, Germany will release the ZEW confidence index. Then also appears retail sales from the United States, which is seen as a measure of consumer spending.

Oil prices may move on Wednesday due to the weekly US inventory alerts in addition to the monthly report from the International Energy Agency. OPEC became slightly more positive last week about the expected development of oil demand in its monthly report.

Weekly US aid requests are on the agenda on Thursday, as are major indicators from the US.

Central banks

Various central banks will publish interest rate decisions next week. Last week, the European Central Bank did what the market expected to maintain monetary policy while ramping up bond purchases below PEPP to limit the rise in long-term interest rates.

The US Federal Reserve will release its interest rate decision next Wednesday. Chairman Jerome Powell disappointed investors recently when he indicated that too high inflation could cause him some concern. Investors fear that the central bank’s supportive policy could weaken if inflation rises too much. However, the rise in US consumer prices wasn’t too bad in February. Additionally, the Fed has indicated on several occasions that it will tolerate rising inflation temporarily.

No changes in monetary policy are expected on Wednesday, but the so-called point conspiracy, with policymakers’ predictions about how the federal funds rate will evolve in the medium and long term, will certainly be of interest to the market.

In December, monetary policy makers expected key interest rates to remain in the current range of 0.00 to 0.25 percent through the end of 2023.

Looking ahead, economists at Nomura said: “If the Fed revises its pip chart upwards and this comes as a surprise to the market, it will definitely disrupt market sentiment.” They are not ruling out the possibility that policymakers now expect to raise interest rates once in 2023.

The Bank of England will release its interest rate decision on Thursday and the Bank of Japan on Friday.

Economists at Nomura expect the UK interest rate decision to be less exciting than the one in February, when the Bank of England indicated that it was open to negative interest rates, although it is likely that they will only be used in a very special case.

Business figures

Earnings season is coming to an end so next week will be very quiet at the corporate level, with only Nedap Investor Day on Wednesday and Marel Annual Meeting on the same day.

In the coming weeks, the last few companies will come out with annual numbers and more shareholder meetings are scheduled to take place, often online due to the coronavirus.

The season of overseas earnings is also coming to an end. At the end of the week, southern neighbors will receive numbers from Exmar, fellow Boskalis, Fugro and Vopak sector.

From Germany there are numbers from Salzgitter on Monday. In the United States, fuel cells will publish their results on Tuesday. On Thursday there will be numbers from Carnival, FedEx and Nike.

ABM Financial News; [email protected]; Revised text: +31 (0) 20 26 28999.