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Investing.com – After a series of disappointing economic reports, the final reading of US growth in the fourth quarter will be the main event of the financial markets over the coming week as investors look for new signals from investors. the strength of the economy.
In addition to the GDP report, this week's calendar also contains data on personal consumption expenditure inflation (PCE), the Federal Reserve's preferred indicator for inflation.
Market players will also pay close attention to comments from a parade of Fed officials this week to better understand the outlook for monetary policy in the coming months. Last week, the Fed practically gave up raising interest rates this year, which could mark the end of its three-year monetary policy tightening cycle.
Investors also have their eyes riveted on the, where the gap between the yields of three-month Treasury bills and 10-year bonds has reversed for the first time since 2007. The inverse yield curve is widely understood as a leading indicator of the recession.
Meanwhile, trade talks between the United States and China will also keep investors on their guard this week, while Treasury Secretary Steven Mnuchin and other members of the Trump administration go to Beijing.
There are also Brexit titles to watch for.
Investing.com has compiled, before the week ahead, a list of the five most important events of the economic calendar most likely to affect the markets.
1. US GDP in Q4 – Final estimate
US economic reports will remain topical, especially after a recent disappointing data set showing that consumers and businesses have retreated.
The US Department of Commerce will release Thursday final figures of economic growth in the fourth quarter at 8:30 (ET) (12:30 GMT).
It should show that the economy has grown at an annual rate of over the last three months of 2018, revised downward from a preliminary estimate of 2.6%. It rose 3.4% in the third quarter of last year.
The economy slows as the $ 1.5 trillion tax cut and increased government spending declines. A trade war between the United States and China, a slowdown in world growth and uncertainties about Britain's exit from the European Union cloud the outlook.
2. Inflation data from the United States ECP
The Commerce Department will release personal income and consumer spending data for January, which includes personal consumption expenditure (PCE) inflation data at 8:30 am (EST) (12:30 pm ET). GMT) on Friday.
According to forecasts, the report will show that the basic price index of the ECP has increased slightly, having risen at a similar pace a month earlier. On an annualized basis, the base prices of the ECPs are expected to increase.
The Fed uses the main PCE as a tool to determine whether to increase or decrease interest rates, the goal being to maintain inflation at a rate of 2% or less.
Other key economic data expected this week include the latest consumer confidence report CB, as well as data on building permits and housing starts.
3. Powered speakers
A handful of Fed speeches will attract market attention this week, as traders wait for more and more clues about monetary policy.
Charles Evans, President of the Chicago Fed, Patrick Harker, President of the Philadelphia Fed, and Eric Rosengren, President of the Boston Federal Reserve, are ready to deliver a speech on Monday.
Evans and Harker are back on the agenda for Tuesday, as is Mary Daly of the San Francisco Federal Reserve.
On Wednesday, Esther George, President of the Kansas City Federal Reserve, delivers comments at an event organized by the Money Marketeers of New York University.
Fed Vice President Richard Clarida, Fed Governor Randal Quarles, Fed Governor Michelle Bowman and St. Louis Fed President James Bullard are all signed up for Thursday.
Quarles is then available again on Friday.
Last week, Fed officials suggested that no rate hike would occur this year, having indicated in December that two of them could take place. The US central bank has also indicated its intention to end the reduction of its huge balance sheet of $ 4,200 billion by September.
4. Trade Discussions between the United States and China
They are expected to resume high-level trade talks this week, but it is unclear whether the two sides will be able to reduce their differences and end the trade war between the two largest economies in the world.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for the latest round of high-level trade talks scheduled for Thursday.
US President Donald Trump said on Friday that negotiations to resolve an eight-month-old trade dispute between the two largest economies are progressing and that a final agreement seems likely.
However, US officials downplayed the prospect of a swift conclusion as China did not yield to US demands to ease restrictions on technology companies, the paper quoted three people as saying on Sunday.
According to the FT report, Beijing has not yet offered any "significant concessions" to US requests asking China to stop discriminating against foreign cloud computing providers, to reduce the limits on data transfers abroad and ease the obligation of companies to store data locally.
5. Uncertainty related to Brexit
The risk of an exit without UK's damaging deal from the EU on March 29 was averted thanks to the bailout granted to other European leaders last week.
But the possibility could come back on April 12th. Or the delay could extend in May or beyond, depending on the Prime Minister's ability to break the Brexit deadlock in Parliament.
After three years of tortuous debates, we still do not know how, when and even if the Brexit will take place.
May hinted Friday that she may not be able to present her divorce agreement to Parliament twice failed in parliament this week, thus leaving her Brexit strategy in shambles. The Times and the Daily Telegraph reported that the pressure of resignation increased in May.
– Reuters contributed to this report
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