In the new trading week, investors are likely to pay particular attention to the official jobs report and inflation data for the United States. The absence of an attack by the US on Iran over the weekend could provide signs of relaxation. The recent elections in Japan are also likely to be a topic of discussion.
Japanese Prime Minister elected with a clear majority - uncertainty due to US monetary policy likely to remain
Japanese Prime Minister Sanae Takaichi won a clear election victory. This makes the ruling LDP party the first party since the Second World War to win more than two thirds of all seats in early parliamentary elections. In this context, investors are hoping for new economic stimulus programs from the government.
Investors are likely to continue to rack their brains over the future shape of US monetary policy. Following US President Donald Trump's recent nomination of former governor Kevin Warsh as the new Fed Chairman, uncertainty surrounding monetary policy remains high. Last week, the markets had priced in a more restrictive approach by the possible new Fed chief.
However, according to the latest calculations by the CME Group's „Fed Watch Tool“, the chance of a rate cut of a quarter of a percentage point at the upcoming meeting on March 18 currently stands at 15.8%, which is higher than a week ago (10.4%). In contrast, 84.2 percent of market participants expect a pause in interest rates.
Overall, the economic data calendar this trading week tends to remain manageable.
Tuesday should initially be dominated by the publication of new US retail sales figures (14:30).
US labor market data expected on Wednesday - economists expect job growth compared to the previous month
On Wednesday, for example, the „Non-Farm Payrolls“ will be published, which are usually tapped for monetary policy indications (14:30).
The data in question was supposed to be published last Friday, but was postponed due to the recent partial US budget dispute. Economists expect non-farm payrolls to increase by 70,000 units, after 50,000 new jobs were created in December.
The unemployment rate and the development of average hourly wages should also be taken into account.
US inflation could fall further - focus on core rate of inflation
The publication of US consumer prices is scheduled for Friday (2:30 pm) and will therefore also be delayed. Experts expect an inflation rate of just 2.5% (compared to the same month last year), after 2.7% in December.
The core rate of inflation, which excludes the drivers energy and food, should also be taken into account.
US reporting season: More companies present their figures
In the reporting season, Coca-Cola (ISIN: US1912161007) and Ford (US3453708600) will be in the spotlight on Tuesday with their results for the past financial quarter. On Wednesday, McDonald's (ISIN: US5801351017) and on Thursday Applied Materials (ISIN: US0382221051) will report.
