© Reuters
Written by Noreen Burke
Investing.com – It’s set to be a quieter week on the economic calendar, but there’s still a lot for markets to watch out for after last week’s rate hike by the Federal Reserve and an unexpectedly strong US nonfarm payroll report on Friday. . Earnings season continues with media and consumer stocks in the spotlight. The Reserve Bank of Australia is set to raise interest rates again, while data in the region and the UK will be watched closely. Here’s what you need to know to start your week.
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Powell’s letter
After a stronger-than-expected employment report forced investors to reset expectations about how optimistic the Fed is in its efforts to rein in inflation, markets will be watching closely on Tuesday.
nearly three times more than expected.
Powell last week acknowledged progress in fighting inflation again, but unexpectedly strong jobs data has given the central bank more latitude to keep raising interest rates.
Investors fear that aggressive interest rate increases by the Federal Reserve will plunge the economy into recession.
There will be a labor market update with Thursday’s numbers, while several other federal officials are also scheduled to appear, including New York Federal Reserve Chairman Neil and Atlanta Fed President Raphael Raphael.
Expectations and expectations:
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earnings season
Earnings season tops the agenda with earnings reports from media and consumer stocks awaiting their turn to the fore.
The Walt Disney Company (NYSE:), which is facing a battle over board representation, and News Corp. (NASDAQ:), which has scrapped a plan to reunite with Fox Corp., are filing reports on Wednesday and Thursday, while it is due to release New York Times Co (NYSE:) reported on Wednesday.
Earnings from PepsiCo Inc (NASDAQ:) and Kellogg’s Co (NYSE:) on Thursday will give an insight into how consumers deal with inflation. More than 90 companies are expected to publish results in the coming week.
As 190 companies reported earnings, S&P earnings are set to fall 2.4% in the fourth quarter from last year — a sharper drop than the 1.6% drop expected on Jan. 1, according to Refinitiv data.
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central banks
Markets expect another quarter-point rate hike by the Reserve Bank on Tuesday after inflation rose to a 33-year high in the latest quarter, challenging the RBA.
Other economic data shocked in another way as retail sales fell the most since during the pandemic and house prices suffered their biggest drop since at least the 1980s.
The outlook for the Australian dollar has not changed: as long as China’s reopening is on track, the currency should go higher.
Meanwhile, the RBI’s inflation battle may be over, as economists expect another 25 basis point interest rate hike on Wednesday before a pause.
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Euro-zone
The market will be watching ECB officials’ comments closely after it raised interest rates by 50 basis points last Thursday and promised everyone more in March.
European Central Bank President Christine Lagarde cited high core inflation to explain why monetary tightening should go ahead: “We have more ground to cover and we’re not done.”
The ECB vice president and executive board member is set to appear in the coming days, along with the head of the Bundesbank.
Germany releases January data – which lags behind last week – on Thursday, which economists expect to accelerate again.
Ahead of that, Germany is to publish data for Monday followed by a report for Tuesday.
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United Kingdom to avoid recession
The UK publishes, which is expected to show a stabilizing economy in the fourth quarter, narrowly avoiding a recession.
The Bank of England said last week that Britain remains poised for a recession this year, but that it is likely to be “much weaker” than previously feared due to lower energy prices and weak interest rate expectations in the market.
for the tenth consecutive meeting last Thursday but said the tide was turning in his fight against inflation.
The British economy was hit hard by the energy crisis after the Russian invasion of Ukraine. It also suffered a decline in the size of its workforce along with lower business investment and weaker productivity growth in the aftermath of Brexit.
