U.S. Economic Data to Watch
The U.S. economy is set to be in focus this week with a range of data releases, including reports on durable goods orders, consumer confidence, and home sales. The February ISM manufacturing and service sector reports will be published on Wednesday and Friday. The consumer confidence data due on Tuesday is expected to increase to 108.5 after a drop in January.
Fed Speakers and Interest Rates
The Federal Reserve will have a quiet week, with only Governor Chris Waller's speech on the economic outlook on Thursday being the main highlight. Investors are wary of the Fed's hawkishness, as a strong rebound in consumer spending and accelerating inflation has added to concerns over the "no landing" economic scenario. In this scenario, strong growth keeps inflation elevated, prompting the Fed to keep interest rates higher for longer.
Eurozone Inflation Data
Investors will closely monitor Eurozone inflation data this week, as another 50-basis point rate hike by the European Central Bank (ECB) at its upcoming meeting in mid-March is almost certain. The preliminary February data from Germany, France, Spain, and Portugal is due on Tuesday and Wednesday, followed by the flash number for the Eurozone on Thursday. Despite easing price pressures, inflation is still well above the ECB's 2% target, and hawkish officials are pushing for aggressive rate hikes to continue.
China's PMI Data
China's PMI data, due on Wednesday, will provide insights into the world's second-largest economy's reopening post-Lunar New Year holidays. Initial indications point to a rebound in consumer activity, and upbeat data could revive optimism for the reopening of trade.
Retail Earnings to Watch
This week's earnings from high-profile retailers will give further insight into the health of consumer spending and the impact of inflation on company bottom lines. Companies such as Target, Dollar Tree, Lowe's, Macy's, Best Buy, Nordstrom, and Costco are expected to report their results. Results from Walmart and Home Depot last week indicated a cutback in spending due to soaring prices.