Top 5 Things to Watch in Markets in the Week Ahead

US Inflation

This week, all eyes will be on the inflation outlook, with the release of January’s Personal Consumption Expenditures (PCE) price data on Thursday. Recent economic indicators suggest a robust U.S. economy despite prolonged high-interest rates, potentially delaying Federal Reserve rate cuts.

• Economists expect a 0.3% increase for January, following a 0.2% uptick in the previous month.
• Other data releases include reports on retail sales, GDP, jobless claims, and consumer confidence.

Retail Earnings

As earnings season winds down, key retailers like Lowe’s, Macy’s, TJX, and Best Buy are set to report earnings. These reports offer insights into consumer spending trends and market sentiment amid shifting monetary policy expectations.

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• Investors anticipate benefits from a potential “soft landing” scenario, where inflation cools without disrupting economic growth.

Eurozone Inflation

Friday will see the Eurozone releasing crucial inflation data ahead of the upcoming European Central Bank meeting. Inflation figures are closely monitored as the ECB aims to maintain price stability and sustainable economic growth.

• Expectations point to an annual reading for February as the ECB continues to assess interest rate policy.

China PMIs

Chinese authorities are intensifying efforts to stabilize their economy through monetary and regulatory measures. Friday’s PMI data will provide insights into China’s economic health and the effectiveness of recent stimulus efforts.

• Economists predict continued contraction in manufacturing PMI, while services PMI is expected to hold steady.

Oil Prices

Oil prices faced downward pressure last week amid uncertainty over U.S. interest rate cuts. Market dynamics, including fuel demand and supply conditions, will influence oil price movements in the near term.

• Fed Governor Christopher Waller’s comments on delaying rate cuts may impact oil demand and overall market sentiment.