Investing.com - Global financial markets will focus on this week's U.S. inflation data to gauge how it will impact the Federal Reserve's view on monetary policy in the months ahead.
Staying in the U.S., there is also retail sales data for February. The reports should provide further clues about the strength of the economy ahead of the Fed's March 20-21 meeting.
Meanwhile, in Europe, investors will await monthly inflation data to assess how fast the European Central Bank will end its massive economic stimulus program in the wake of last week's ECB meeting.
A monetary policy announcement from the Swiss National Bank will also be in focus, though it’s highly unlikely it will rock the boat policy-wise.
Elsewhere, market participants will keep an eye out for Chinese industrial production data amid recent signs that momentum in the world's second largest economy remains strong.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S. Inflation Data
The Commerce Department will publish February inflation figures at 8:30AM ET (1230GMT) Tuesday.
Market analysts expect consumer prices to rise 0.2%, weakening from January's 0.5% increase, while core inflation is forecast to inch up 0.2%, a touch slower than a month earlier, when core CPI recorded a 0.3% gain.
On a yearly base, core CPI is projected to climb 1.8%, unchanged from the preceding month. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates at a faster pace than currently expected.
Data released Friday showed that U.S. job growth surged in February, recording its biggest increase in more than 1-1/2 years, but a slowdown in wage gains pointed to only a gradual increase in inflation.
That could help dispel any views that the Fed will be forced to tighten policy at a quicker pace than expected this year.
2. U.S. Retail Sales
The Commerce Department will publish data on retail sales for February at 8:30AM ET (12:30GMT) Wednesday.
The consensus forecast is that the report will show retail sales rose 0.3% last month, snapping back after a decline of 0.3% in January.
Core sales are forecast to inch up 0.3%, after holding flat a month earlier.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.
Besides the inflation and retail sales reports, this week's calendar also features U.S. data on producer prices, building permits, housing starts, industrial production, weekly jobless claims, Michigan consumer sentiment, as well as surveys on manufacturing conditions in the Philadelphia and New York regions.
There are no major speeches from Fed officials scheduled for this week.
Traders are currently putting the chances of a 25-basis-point hike by the Fed at its March 20-21 meeting at around 90%, according to Investing.com's Fed Rate Monitor Tool.
Meanwhile, on Wall Street, with few earnings slated for this week, financial stocks will be in focus as Congress considers a bill to loosen post-financial-crisis regulation for smaller banks.
Elsewhere, news out of Washington D.C. is expected to keep investors on their toes, after President Donald Trump imposed tariffs on aluminum and steel late last week.
3. Euro Zone CPI
The euro zone will publish final inflation figures for February at 1000GMT (6:00AM ET) Friday. The report is expected to confirm that consumer prices rose 1.2%, 0.1% slower than in the previous month.
Perhaps more significantly, the core figure, without volatile energy and food prices, is seen holding steady at 1.0%, unchanged from a month earlier.
Final inflation figures for Germany, France, Spain and Italy are also due this week.
The European Central Bank dropped a long-standing pledge at its meeting last week to increase its bond-buying if needed, taking another small step in weaning the euro zone economy off its protracted stimulus.
Keeping its broader policy unchanged, the ECB said it could still extend its 2.55 trillion euro ($3.16 trillion) bond purchase scheme beyond September if needed.
President Mario Draghi and several other ECB officials are scheduled to speak this week so there will be further guidance on the pace of change ahead.
The euro-area economy is undergoing its broadest expansion in a decade. Yet inflation pressures remain feeble, underlining the ECB's caution in removing stimulus.
4. SNB Policy Assessment
The Swiss National Bank's quarterly monetary policy assessment is due on Thursday at 0830GMT (4:30AM ET). Most economists forecast the central bank’s benchmark interest rate to remain unchanged at -0.75%.
The SNB is also expected to stick to its commitment to foreign currency interventions if necessary.
SNB Chairman Thomas Jordan is slated to repeat that the Swiss franc remains “highly valued”, despite a brighter economic outlook and recent weakening of the currency.
Most analysts see the SNB staying on hold until the European Central Bank makes its own move to raise interest rates.
5. China Industrial Output
China is to release February industrial production figures at around 0200GMT on Wednesday, amid expectations for an increase of 6.3%, a tad better than the 6.2% recorded in the preceding month.
At the same time, the Asian nation will publish reports on fixed asset investment and retail sales.
Data from China early in the year is typically treated with caution by economists due to business and price distortions caused by the timing of the week-long Lunar New Year celebrations, which fell in late January 2017 but started in mid-February this year.
Analysts expect investors may not get a clearer picture of China's economic health until first-quarter data is released in April.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/