In the new trading week, investors are likely to keep an eye on US inflation data in particular. Following the publication of the US labor market data last Friday, hopes for interest rate cuts in the summer remain high.
It is therefore possible that the recent record rally on Wall Street could continue this week for the time being.
INTEREST RATE CUT FANTASIES MUTED FOR THE TIME BEING - US PRODUCER PRICES TOO STRONG
Subdued interest rate cut fantasies forced the record chase to pause for the time being last week. While the US inflation data were above expectations overall, they continued to show a downward trend.
Rather, the development of US producer prices, which rose twice as much month-on-month in February as previously thought, caused irritation. This data usually serves as an indication of future inflation trends.
CHINA DATA LIKELY TO PROVIDE IMPORTANT IMPETUS AT THE START OF THE WEEK - FED RATE DECISION ON WEDNESDAY
New China data is likely to attract interest at the start of the week. In addition to retail sales, new figures on industrial production will have to be examined for economic clues (03:00).
The economic calendar should only become interesting again on Wednesday. Due to the time difference, the Fed interest rate decision will take place at 19:00. The subsequent FOMC press conference (19:30) is likely to attract attention. Market participants are firmly expecting a pause in the current interest rate cycle. The rhetoric from Fed Chairman Jerome Powell could decide the weal and woe of the stock markets. On the futures markets, there is currently a 60 and 70 percent chance respectively that the June and July meetings could result in a rate cut.
The UK, Japan and Switzerland will also decide on the future level of key interest rates this week.
PURCHASING MANAGERS IN FOCUS ON THURSDAY - FED REPRESENTATIVES ROUND OFF TRADING WEEK
New purchasing managers from S&P Global are likely to provide important impetus on Thursday. Despite a fall of 0.5 points, the index for the manufacturing sector could remain above the growth threshold of 50 points at 51.7 units. A value of 52 points is expected for the services sector, following 52.3 units.
The central bank representative Barr (Vice Chairman for Supervision) is likely to provide monetary policy guidance at 17:00.
On Friday, Fed member Barr will again appear before the public at the same time. His colleague Bostic from the Atlanta Fed will be in the spotlight from 21:00.
