Though the Fed did its best to reassure investors, bond yields still rose last week following March’s meeting. How will central bank chief Jerome Powell handle the issue in his multiple appearances this week?
US: What will Powell have to say?
Jay’s a busy boy. On Monday he is due to participate in a virtual panel hosted by the Bank for International Settlements, while on Tuesday and Wednesday he testifies, alongside Treasury Secretary Janet Yellen, in front of the House Financial Services Committee and the Senate Banking Committee respectively.
Appropriate levels of monetary policy in the face of a rebounding economy, the tolerance of inflation beyond the 2% target, and the pesky question of falling bond prices and rising yields are all likely to come up. And Powell’s answers could have a big impact on how the markets ride out the final full week of March.
Beyond Powell’s many appearances, there is the existing home sales reading on Monday, the flash manufacturing and services PMIs on Wednesday, and the final Q4 GDP reading and the usual jobless claims number on Thursday.
A busy Friday then sees personal income, personal spending and consumer sentiment, alongside what could be an important core PCE price index. The figure is a favourite of the Fed, and the US inflation readings are only going to become more and more relevant as the months go on and the American Rescue Plan kicks in.
UK: Plenty of data for the FTSE and pound to work with this week
There’s a fair amount for the FTSE and pound to work with this week. The jobs report is released on Tuesday, which could reflect the impact of last month’s better than forecast claimant count change reading on the unemployment rate.
February’s Inflation reading – which last month stood at 0.7% – is then joined on Wednesday by the flash manufacturing and services PMIs for March.
Friday, meanwhile, has the retail sales data for February, looking to bounce back after a nasty 8.2% contraction in January.
Also of interest is an appearance from Bank of England governor Andrew Bailey, alongside ECB chief Christine Lagarde, at a virtual event for the Bank for International Settlements. Like with Powell earlier in the week, any comments on bonds, inflation and the European economic recovery could impact trading.
UK: Stocks to Watch
As for the corporate calendar, Kingfisher and Centamin report on Monday, with Alliance Pharma on Tuesday, Pendragon and Bellway on Wednesday and Allied Minds on Thursday.
Alongside the central banker focus mentioned above, the Eurozone is facing the region-wide current account number on Monday, the flash manufacturing and services PMIs on Wednesday, and the German Ifo business climate figure on Friday.
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