Week ahead: Rate decisions behind, inflation data up next

A Week Full of Inflation Data Releases 

Rates decisions are behind us, now it’s the turn of the inflation data. US core PCE inflation data will be the big event of the week as markets continue to react to last week’s Federal Reserve decision and other central bank calls. 

Japanese and Australian inflation figures are also due up after their respective central banks met last week too. We also have some useful US economic data – GDP and durable goods for instance. 

Here are the week’s key events:

Monday: Bank of Japan Minutes 

It's a light start to the week in terms of the data with monetary policy meeting minutes covering the recent historic decision by the Bank of Japan to raise rates interest rates last week. Thereafter it’s just US new home sales to ponder, but investors will continue to digest last week’s busy schedule of central bank meetings and what they mean for bond markets.  

Kingfisher's final results in London will highlight how much DIY-ing is not happening due to a lacklustre housing market.  

Tuesday: U.S. Durable Goods Orders, Case-Schiller House Price Index 

U.S. economic data has continued to paint a rather mixed picture for investors, muddying the picture and making it all the harder to gauge when the Federal Reserve is likely to cut. The latest barrage of economic data out of the U.S. comes today with durable goods orders, which fell by the most in almost four years in January – though a sharp decline in orders for commercial Boeing aircraft played a big part in the decline.  

Also due up are the Case-Shiller house price index, Richmond manufacturing index and Conference Board consumer confidence survey. 

Wednesday: Australia Inflation Report 

The Reserve Bank of Australia last week left rates on hold and dialled down some of the more hawkish language from its statement. It’s now decidedly data-dependent, noting its accompanying statement that “the Board is not ruling anything in or out” for the future direction of rates.  
 

Investors will therefore be keen to see what the central bank thinks of the latest CPI inflation report. Spanish CPI inflation data and the Bank of England’s Financial Policy Committee report may be of interest. Weekly crude inventory will be as useful as ever. 

Thursday: U.S. and UK Inflation, Australia Retail Sales 

Following the inflation data, retail sales numbers from Australia are due alongside the ANZ business confidence report for New Zealand. Final U.S. and UK GDP data will be released, but better-leading indicators come in the shape of the Chicago PMI, UoM inflation expectations and consumer sentiment reports.  

Meanwhile, the Tokyo core CPI inflation report gets added attention in the wake of last week’s Bank of Japan rate hike. 

Friday: U.S. Core PCE Inflation 

Finally, the big set piece event is the US core PCE inflation reading, the Fed’s preferred measure of prices. CPI and services inflation reports have been higher than anticipated so the market will want to see if the PCE goes the same way or shows a bit more inclination towards disinflation.  

Headline PCE increased 0.3% monthly and 2.4% on a 12-month basis in January, whilst the core reading rose 0.4% and 2.8%.  

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