Investing.com - The Federal Reserve’s policy meeting will be the big deal for markets in the week ahead. While the U.S. central bank is not expected to take action on interest rates, investors will be watching for signals on how patient it will be before raising borrowing costs again.
Policymakers have pointed to two increases in 2019, but a recent wave of underwhelming U.S. economic data, along with worries over the ongoing U.S.-China trade conflict, have underlined expectations the Fed may pause its rate-hiking cycle altogether this year.
Elsewhere, British Prime Minister Theresa May will try again to get parliament's approval for her proposed deal on leaving the European Union. The unpopular agreement has already been heavily rejected twice but prospects of a long delay or even another referendum that may reverse Brexit could well swing eurosceptic Tories over to her side.
A monetary policy announcement from the Bank of England is also on the agenda, though it's highly unlikely it will rock the boat policy-wise amid uncertainty over Brexit.
Staying in Europe, markets are keeping an eye on flash PMI surveys on manufacturing and service sector activity, which should give further indication of how the region's economy fared at the end of the first quarter amid global trade conflicts and messy Brexit negotiations.
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. Federal Reserve Rate Decision
The Federal Reserve is not expected to take action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET (18:00 GMT) on Wednesday, keeping it in a range between 2.25%-2.5%.
Fed Chair Jerome Powell will hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement.
The U.S. central bank will also release new forecasts for economic growth and interest rates, known as the "dot-plot", which will probably point to either no more rate hikes this year or to one more at most.
The Fed will also likely announce further details on when it will end its operation to unwind its balance sheet.
2. Philly Fed Manufacturing Survey
U.S. economic data will also remain in focus, following a series of weak reports, with the latest Philly Fed manufacturing survey topping the agenda.
The report, which comes out at 8:30AM ET (12:30 GMT) on Thursday, is expected to show a reading of 6.1 in March. It dropped sharply into negative territory for the first time since May 2016 in February, hitting -4.1.
Investors will pay particular attention to the data after a similar survey last week showed manufacturing activity in the New York area fell to the lowest since May 2017 this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.
PMI data Friday on manufacturing and the services sectors will be important. Existing home sales are also released Thursday.
3. Another Brexit Vote
British Prime Minister Theresa May warned lawmakers over the weekend that unless they approved her Brexit divorce deal, Britain's exit from the European Union could face a long delay.
Her deal, an attempt to keep close relations with the EU while leaving the bloc's formal structures, was defeated by 230 votes in parliament on Jan. 15 and by 149 votes on March 12.
But May continues to fight to build support for her plan, which is expected to put before lawmakers for a third time next week, possibly on Tuesday.
To get it through parliament, the prime minister must win over dozens of Brexit-supporting rebels in her own Conservative Party and the Northern Irish Democratic Unionist Party (DUP) which props up her minority government.
After two-and-a-half years of tortuous divorce negotiations with the EU, the final outcome is still uncertain with options including a long delay, exiting with May's deal, a disorderly exit without a deal or even another referendum.
4. Bank of England Policy Announcement
Governor Mark Carney and his fellow interest rate-setters are expected to keep borrowing costs on hold at 0.75% when the Bank of England makes its policy announcement at 8:00AM ET (12:00 GMT) on Thursday.
Economists expect a 9-0 vote by the MPC in favor of leaving rates steady.
In addition to Brexit and the BoE, market players will focus on the monthly jobs report, as well as the latest inflation and retail sales figures for further hints on the health of the economy.
Britain's economy came close to stagnating again in February amid Brexit nerves and sluggish global growth.
5. Flash Euro Zone PMIs
IHS Markit's composite flash Purchasing Managers' Index (PMI) for the euro zone is due at 5:00AM ET (09:00 GMT) on Friday, amid expectations for a slight increase to 52.0.
The index measures the combined output of both the manufacturing and service sectors and is seen as a good guide to overall economic health.
Ahead of the euro zone PMI's, France and Germany will release their own PMI reports at 4:15AM ET (08:15 GMT) and 4:30AM ET (08:30 GMT) respectively.
Earlier this month, the European Central Bank pushed back until at least 2020 the timing of its first post-crisis rate increase. It also offered banks a new round of cheap loans to help revive the euro zone economy.
-- Reuters contributed to this report