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HomeLatest NewsWeekly newsKey Economic Reports and Earnings Releases Set to Drive Investor Sentiment.

Key Economic Reports and Earnings Releases Set to Drive Investor Sentiment.

Key Economic Reports on U.S. inflation on Friday, with Federal Reserve officials, including Chair Jerome Powell, closely monitored following last week’s dovish remarks.

US Data

The US Federal Reserve is set to release the core personal consumption expenditures price index, a gauge of underlying inflation, on Good Friday. The index, which excludes food and energy costs, is forecast to rise 0.3% in February. The Fed has maintained projections for three interest rate cuts this year, despite revising its economic growth forecast. Other economic data includes new home sales, durable goods orders, revised GDP, and initial jobless claims.

Fed Speech

Fed officials, including Fed Chair Jerome Powell, Atlanta Fed president Raphael Bostic, and Fed governors Lisa Cook and Christopher Waller, are expected to speak in the coming week. Analysts predict that Fed speakers will lean more hawkish, particularly regarding the long-term path for policy interest rates, which could impact the 10-year yield. Powell’s dovish tone surprised analysts and ran counter to other Fed policy officials’ thinking. However, the Fed’s updated economic projections suggest that Powell’s colleagues expect stronger economic growth, higher inflation, and a modest rise in the Fed’s longer-term rate, suggesting a less dovish picture than the one delivered by the Fed chief.

Indcies

The S&P 500 and Dow Jones Industrial Average saw their largest weekly percentage gains since mid-December, with the S&P 500 posting its largest weekly percentage gain since mid-December. Some market watchers predict a pullback after a 27% gain since late October. Others believe the trend will continue as investors look beyond growth and technology stocks. The wider rally suggests that leadership is less concentrated and susceptible to correction. The upcoming end of the first quarter could also prompt volatility as fund managers adjust their portfolios.

Oil Price

Oil prices fell on Friday due to the possibility of a ceasefire in Gaza, while the war in Europe and shrinking US rig count offset losses. A possible ceasefire could prompt Yemen’s Houthi rebels to allow oil tankers to pass through the Red Sea. A stronger US dollar also boosted global risk sentiment, making oil more expensive for investors holding other currencies and dampening demand. Jim Ritterbusch, of Ritterbusch and Associates, said that fresh highs are still on the table due to a broad-based expansion in risk appetite.

Australia & Japan annual inflation rate

The Reserve Bank of Australia is awaiting Wednesday’s inflation figures for any surprises, as February data will reveal more price changes for services, which have been declining at a slower pace than goods. The figures may suggest the RBA should remain in wait-and-see mode before implementing rate cuts as the economy slows. The annual inflation rate is expected to rise to 3.5% in February. In Japan, the release of inflation figures may be less exciting after the Bank of Japan hiked interest rates for the first time in 17 years.

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“We think the Fed is still likely to ease at mid-year (June or July), but the FOMC meeting will keep us squarely in the wait-and-see period by another one or two meeting cycles, with Jay Powell repeating that he needs a “little bit more” evidence that disinflation is sustainable before cutting the Fed Funds rate target,” Macquarie analysts wrote.

Investors await Tuesday’s U.S. inflation data to gauge Fed interest rate cuts, with February’s consumer price index expected to rise 0.4% after a faster increase of 0.3% in January.

Fed Chair Jerome Powell indicated that a rate cut may be appropriate this year, but he and his team are not yet prepared. Market observers will also be examining February’s retail sales data, which is expected to rebound 0.8% after a similar decrease a month earlier.

The economic calendar also features updates on industrial production, consumer sentiment and weekly data on initial jobless claims.

Fed officials will be entering the traditional blackout period ahead of their upcoming meeting next week.

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