Week Ahead

The crisis in Ukraine appears far from resolved, making the conflict the main variable investors need to weigh in the week ahead. On the data front, the spotlight will be taken by US non-farm payrolls, Euro Area inflation rate, China manufacturing PMI’s and Q4 GDP growth rates for India, Canada, Australia, Turkey, Switzerland and Brazil.

In the US attention will turn to payrolls report which is likely to show the American economy added 450K jobs in February, after a surprisingly-high 467K gain in January, signalling the jobs market is much stronger than initially thought. The unemployment rate is seen falling to 3.9% while wage growth likely accelerated to 5.8%. Other important economic indicators to follow include the goods trade balance; ISM manufacturing and non-manufacturing PMIs; ADP employment; final Markit PMIs; factory orders; construction spending; and final estimates for productivity and labour costs. Traders will also carefully monitor Chair Powell’s semiannual report to the Congress on Tuesday and Wednesday for any more clues on the Fed’s next steps, the economic outlook and the impact of the Ukrainian crisis on the US economy and the policy outlook.

On the earnings front, HP, Zoom, Target and Kohl’s will deliver their quarterly results. So far, 76% of S&P 500 companies have reported a positive EPS surprise and 78% a positive revenue surprise, according to Factset.

Elsewhere in America, it will be interesting to follow: Bank of Canada interest rate decision, Canada and Brazil GDP growth for Q4, and Markit PMIs for Canada, Mexico and Brazil.

In the United Kingdom, final Markit PMIs in the UK are expected to confirm the country’s service sector expanded the most in 8 months while the manufacturing activity held steady at a 4-month low. Other important releases include the Bank of England’s monetary indicators, construction PMI and new car sales. On the corporate side, investors await 2021 results from Aviva, ITV and Taylor Wimpey.

Elsewhere in Europe, investors will be waiting for the ECB monetary policy meeting accounts. Also, key inflation reports will be released for the Eurozone, including those for Germany, Italy and Spain, with forecasts signaling the index of consumer prices in the 19-nation Eurozone economy rose to another record. Still, the euro is much more likely to react to Russia-Ukraine headlines that could induce a more cautious ECB on concerns over the bloc’s economic growth as sanctions on Russia possibly will hit oil and gas flows to Europe. Other notable publications are Eurozone producer prices, retail sales and unemployment rate; Germany jobless rate, retail trade and foreign data; Italy 2021 GDP and government budget; Switzerland and Turkey Q4 GDP.

Investors will also follow the OPEC+ meeting on Wednesday. The alliance of major producers that includes Russia is expected to stick to a planned output increase of 400,000 barrels a day in April, rejecting calls to pump more to ease pressure on prices as crude topped $100 a barrel

It will be a busy week in Australia, with Q4 GDP growth rate, inflation rate and interest rate decision taking the spotlight. In China, manufacturing PMI readings are expected to show slight contraction in February, amid the Lunar New Year festivities and Winter Olympics.