Written by Jesse Cohen
Investing.com – The Fed’s highly anticipated monetary policy meeting will be the big event in global financial markets next week.
Although the US central bank is not expected to take action on interest rates, investors will be watching for any comments on the impressive sell-off in the Treasury markets, as the yield on US Treasuries stood at 1.60% on Friday, the highest in one year. .
In addition to the Fed meeting, US retail sales data will draw attention to new signs of the strength of the economic recovery.
Meanwhile, when it comes to presenting results, there are only a few big names that will publish their financial reports, such as the FedEx World Economic Barometer (NYSE 🙂 and the sportswear giant. Nike (NYSE :).
On the one hand, monetary policy announcements from the Bank of England and the Bank of Japan are also on the agenda, although neither is likely to capsize the monetary policy ship.
Looking ahead, Investing.com has compiled a list of the top five events on the economic calendar that are most likely to affect the markets.
1. Monetary policy meeting of the Federal Reserve
The Federal Reserve is expected to keep benchmark rates unchanged at the end of the two-day period at 7:00 pm (CET) on Wednesday, keeping them in a range of 0.0% to 0.25%.
Perhaps most importantly, Fed Chairman Jerome Powell will deliver nearly 30 minutes after the Fed announcement.
Investors will be looking for clear signs that Powell and other policymakers are concerned about the current spike in US Treasury yields amid mounting inflation expectations.
The US central bank will also release its new forecast for economic growth and interest rates, known as the “dot chart”.
Repeating interest rate projections that anticipate a Fed hike as early as the end of 2022 is not in line with the Fed’s goal of keeping interest rates unchanged until the end of 2023.
2. US retail sales.
The Commerce Department will release retail sales data for February at 8:30 am (CET) Tuesday.
Expectations are that the report will indicate that retail sales fell 0.6% last month, following the 5.3% increase in January.
Excluding the auto sector, sales are expected to decline 0.1% after rising by 5.9% in the previous month.
Increased retail sales over time are associated with stronger economic growth, while weak sales indicate a downturn in the economy.
Consumer spending accounts for up to 70% of the growth of the US economy.
In addition to retail sales, this week’s economic calendar also includes the latest reports on initial claims for unemployment benefits, industrial production, and housing promotion, as well as some surveys of manufacturing sector conditions in the Philadelphia areas. .
3. FedEx and Nike results
The fourth-quarter earnings season is nearing an end, however, reports are expected from a number of big names this week, with most of the attention focused on FedEx and Nike, which will release their data on Thursday after the report closes.
Other notable companies that reported their results this week include General Dollar (NYSE :), CrowdStrike, Coupa Software, PagerDuty, and SunDial Growers.
4. Bank of England monetary policy announcement
Across the pond, Governor Andrew Bailey and his associates are expected to keep financing costs steady at 0.10% when the Bank of England makes its announcement at 2:00 PM (CET) on Thursday.
Economists expect a 9-0 vote from the committee in favor of keeping interest rates unchanged.
Instead, any measure, such as an increase in bond purchasing power at the Bank of England, is likely to come later this year, possibly in May, when the next set of economic forecasts will be written.
5. Bank of Japan monetary policy meeting
Everything points to the Bank of Japan, the leader in controlling the yield curve, while keeping monetary policy unchanged after its two-day meeting that ended on Friday.
However, the central bank is likely to include clearer guidance in its statement on what it considers an acceptable level of volatility in long-term interest rates, according to the sources.
Bank of Japan Governor Haruhiko Kuroda will present one later to explain the decision.
Kuroda and Deputy Governor Masayoshi Amamiya recently sent conflicting messages about easing the target range for 10-year bond yields.