Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
💰 With a 129% YTD gain in the bag, these are our AI’s top global picks for March
Read now
Week Ahead: Stimulus Battle Continues
www.investing.com/analysis/week-ahead-stimulus-battle-continues-200559060
Week Ahead: Stimulus Battle Continues
By MarketPulse (Craig Erlam) | Feb 07, 2021 01:27AM ET A lively start to the year
It’s been a surprisingly lively start to the year, with recent weeks being dominated by retail traders taking on hedge funds and showcasing the power of social media. While that looks to have gone quiet, a repeat performance may not be far away. With the data calendar a little light this week, focus will remain on US stimulus, the vaccine rollout, and earnings.
1. US
The US economy continues to make progress in the fight against COVID as daily cases have declined for almost a month and vaccination efforts accelerate. The nonfarm payroll report showed that the case for more stimulus remains elevated. On Wednesday, the US consumer price index is expected to show price pressures are mild. The reflation trade at one point will trigger a surge with prices, but that should not derail the Fed’s avoidance in tapering stimulus.
President Joe Biden is interviewed on CBS in his first network TV interview since his inauguration. The focus in the US will remain on COVID vaccine rollouts.
On Monday, the US Senate begins former President Donald Trump’s second impeachment trial. Last month, Trump was impeached in a bipartisan vote in the House of Representatives on a charge of inciting the January 6th insurrection at the US Capitol.
2. EU
Next week is looking a little quiet on the data side, with the most notable release being the new economic forecasts on Thursday. The region is continuing to struggle with the vaccine rollout which could mean longer lockdowns and a slower recovery.
The political story continues to center around Italy and whether Italian Premier, Mario Draghi, former president of the European Central Bank, can form a government at a time of crisis for the country. The country is used to political uncertainty but now is not the time to be without a functioning government. Markets have responded positively to Draghi taking on the job but if he fails to form a government, Italian assets may take a hit.
3. UK
No major surprises from the BoE at its February meeting. The first quarter will see less growth – as you’d expect during the country’s third and longest lockdown – but the recovery will pick up with growth returning to pre-COVID levels in the first quarter of next year. Negative rates remain a possibility later this year but still an unlikely one with any further easing likely to come from asset purchases and the Term Funding Scheme.
We’ll hear from Bank of England Governor Andrew Bailey next week, with the most notable data being the GDP reading for the fourth quarter, alongside other lower impact releases.
4. Turkey
The lira rebound continued this week as the Central Bank of the Republic of Turkey (CBRT) stressed its commitment to retaining tighter monetary policy until inflation is back within target, something that will take at least two years. This continues to go against the views of President Recep Tayyip Erdogan. At this time, investors are at ease with this but there always remains the risk that Erdogan will lose patience over time as the economy suffers from higher rates.
5. China
China Balance of Trade released on Monday and Inflation released on Wednesday. Inflation will be closely watched after higher readings from other parts of Asia, Europe and the US. The higher the number the more negative for equities. Peoples Bank of China (PBOC) continues to subtly withdraw liquidity via the repo rollover supporting the yuan.
PBOC is confining yuan to a 6.4000/6.5000 range ahead of Lunar New Year. China will be on holiday for a week starting Thursday.
6. India
Reserve Bank of India (RBI) surprises the market and leaves rates unchanged after the expansionary budget this week. India equities ran nearly 10% higher this week post-budget. Quiet week ahead with India Inflation and Industrial Production due to be released on Friday.
With most of Asia on holiday, the market will remain fixated on the budget-driven equity rally. The USD/INR is expected to remain steady on unchanged RBI.
7. Australia & New Zealand
Australian NAB Business Confidence and New Zealand Food Inflation are unlikely to move markets.
The technical picture suggests AUD/USD and NZD/USD at risk of a material downward correction next week due to rising US yields and US dollar strength. Both have the potential to fall by between 200-300 points.
8. Japan
Japan Current Account and Machine Tool Orders won’t be market-moving. The Producer Price Index (PPI) could show signs of imported energy inflations increasing pressure on the Japan Government Bond Futures.
Domestic consumption is constrained as the COVID state of emergencies are extended and expanded. The Tokyo Olympics are to go ahead with restrictions, removing a key negative risk factor for the domestic economy.
USD/JPY has broken higher through its 100-day moving average at 104.50, for the first time in 7 months. A rise in US yields next week could see the USD/JPY rise to 107.00 next week if US employment data is strong.
Key Economic Events
1. Sunday, February 7th
- Super Bowl 55 between the Tampa Bay Buccaneers and the Kansas City Chiefs. Robinhood has purchased its first-ever Super Bowl ad this year.
Economic Data
China's January 2021 Foreign Reserves estimated at $3.222 trillion vs. $3.216 trillion in January of 2020.
2. Monday, February 8th
- ECB President Christine Lagarde discusses the ECB annual report at the European Parliament.
- Cleveland Fed President Loretta J. Mester speaks about the U.S. economy
Economic Data
Germany's December Industrial production M/M is estimated to be 0.0% vs. 0.9% in December 2020.
Spain Industrial production numbers to be released.
Japan's Balance of Payments (BoP) bankruptcies numbers
Singapore foreign reserves release
3. Tuesday, February 9th
- ECB Chief Economist Philip Lane will participate in a panel discussion
Economic Data
US JOLTS job openings
New Zealand two-year inflation expectation
Australia NAB business conditions
Japan cash earnings, machine tool orders, money stock
Italy industrial production
China new yuan loans, money supply
4. Wednesday, February 10th
- Fed Chair Jerome Powell will speak on a webinar hosted by the Economic Club of New York.
- Bank of Canada Deputy Governor Timothy Lane speaks on payment modernization and digital currencies.
- ECB Executive Board member Fabio Panetta speaks about the potential effects of a digital EUR/USD.
- German Chancellor Angela Merkel discusses the likely extension of COVID curbs with state premiers .
- President Hassan Rouhani will lead tributes on Iranian Revolution Anniversary
- EIA Inventory Report to be released.
Economic Data
- US Jan CPI M/M: 0.4% estimate v 0.4% prior, wholesale inventories, monthly budget statement
- UK GDP, industrial production
- France industrial production
- Sweden rate decision: Expected to leave interest rate unchanged at 0.00%
- Denmark CPI
- Norway CPI
- Australia Westpac consumer confidence
- China CPI and PPI
- Japan PPI
- New Zealand REINZ house sales
- Turkey unemployment rate
5. Thursday, February 11th
- Lunar New Year public holidays are celebrated across Asia, with China breaking from February 11th to 17th.
- European Financial Forum 2021: Ireland’s Prime Minister Michael Martin and Mairead McGuinness, the European commissioner for financial services set to speak
- ECB Governing Council member François Villeroy de Galhau speaks on climate and sustainable finance.
- South Africa President Cyril Ramaphosa delivers the annual state of the nation address.
- OPEC monthly Oil Market Report
- The European Commission provides new economic forecasts.
Economic Data
- US initial jobless claims
- Mexico industrial production
- Mexico Central Bank (Banxico) Interest Rate Decision: Expected to cut Overnight Rate by 25 basis points to 4.00%
- South Africa manufacturing production
- Malaysia GDP
- Philippines rate decision
6. Friday, February 12th
Economic Data
- US Feb Prelim University of Michigan sentiment: 80.5 estimate v 79.0 prior
- Euro-area Dec industrial production M/M: 0.0% estimate v 2.5% prior
- Colombia retail sales
- Canada wholesale trade sales
- Norway GDP
- Poland GDP
- Romania CPI
- Czech CPI
- Hungary CPI
- New Zealand Business NZ manufacturing PMI, food prices
- Turkey current account balance, industrial production
- India industrial production, CPI
- Sovereign Rating Updates
- Hungary (Fitch/S&P)
- Norway (Fitch),
- Sweden (S&P)
- Ireland (Moody’s)
- Belgium (DBRS)
- Luxembourg (DBRS)
Related Articles
3 Key Charts Show Why a Global Reflation Wave Isn’t Here Yet
By Steve Saville - Mar 10, 2025
We haven’t discussed global monetary inflation for a while, mainly because very little was happening and what was happening was having minimal effect on asset prices or economic...
Headlines May Be Overly Bearish, but Technicals Suggest Bull Market...
By Lance Roberts - Mar 10, 2025
Last week, we discussed the more extreme levels of bearishness that have gripped the markets as of late. “In other words, while the media scrambled to align reasons with the...
Stocks Week Ahead: Traders Betting on a Rally May Be Ignoring Key Risk...
By Michael Kramer - Mar 10, 2025
1
I’m sure this week will be interesting, given the CPI and PPI reports. I’m sure the administration will have plenty of on-again and off-again policy statements about something....
Week Ahead: Stimulus Battle Continues
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.