Investing.com - In the week ahead, investors will be looking to Wednesday’s highly-anticipated Federal Reserve policy meeting, amid ongoing speculation over the timing of the next U.S. rate hike.
Traders will also eye a number of reports on the U.S. housing sector to gauge the strength of the world's largest economy.
Elsewhere, market participants will be awaiting a monetary policy announcement from the Bank of Japan on Wednesday, amid growing expectations for further stimulus.
Investors will also be looking to Friday’s survey data on euro zone business activity for fresh indications on the health of the region’s economy in wake of Britain's vote to exit the European Union.
Outside the G7, traders will be awaiting a monetary policy announcement from the Reserve Bank of New Zealand on Wednesday.
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. Fed 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 (18:00GMT) on Wednesday.
The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for any change in tone about the economy or future rate hikes.
Speculation about the timing of the Fed's next interest rate hike has shaken major stock indexes this month following contrasting comments from top Fed officials.
Markets are currently pricing in just a 12% chance of a rate hike next week, according to Investing.com's Fed Rate Monitor Tool. For December, odds stood at around 55%.
In the unlikely case of a rate hike, the U.S. dollar will shoot higher. In the more likely scenario in which rates remain unchanged, the focus will be on the Fed's statement as well as the updated interest rate forecasts. A more hawkish message, which would leave the door open for a rate hike in December, will be dollar-positive, while a dovish statement will result in a dollar sell-off.
2. BOJ policy announcement
The Bank of Japan's latest rate decision is due during Asian hours on Wednesday. The BOJ will also publish a monetary policy statement, where it will present a comprehensive assessment of its policies.
Central bank Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision.
Speculation points to a possible interest rate cut deeper into negative territory, tweaks to its asset-purchase program or new rules on the duration of securities it will purchase in the bond market.
The BOJ has already implemented negative interest rates and is printing 80 trillion yen ($750 billion) a year to stimulate inflation after decades of deflation and stagnant growth, yet inflationary expectations appear to be weakening.
Disappointment over the BOJ's announcement could see the yen strengthen against the dollar and euro.
3. August U.S. housing data
The Commerce Department is to publish a report on housing starts and building permits for August at 8:30AM ET (12:30GMT) on Tuesday. The data could show that permits rose 2.5% to 1.170 million last month, while housing starts are forecast to decline 1.7% to 1.190 million.
On Thursday, the National Association of Realtors is to release data on existing home sales for August at 10:00AM ET (14:00GMT) amid forecasts for a gain of 1.1% to 5.45 million.
4. Flash euro zone PMIs for September
The euro zone is to publish preliminary data on manufacturing and service sector activity for September at 08:00GMT (4:00AM ET) on Friday, amid expectations for a modest decline.
Ahead of the euro zone PMI's, France and Germany will release their own PMI reports at 07:00GMT and 07:30GMT respectively.
5. Reserve Bank of New Zealand rate review
The Reserve Bank of New Zealand’s monetary policy update is due at 21:00GMT (5:00PM ET) on Wednesday. Most market analysts expect the central bank to keep rates steady after cutting them by 25 basis points to a record low 2.0% last month.
Stay up-to-date on all of this week's economic events by visiting: http://www.investing.com/economic-calendar/