Major events of the upcoming week
Last week, Fed officials once again tried to dispel speculation about a possible tightening of monetary policy in the event of increased inflationary pressure. Fed chief Jerome Powell sent a clear signal to the market that the regulator does not intend to discuss tightening monetary policy in the foreseeable future.
The market reaction was not long overdue. Stock indexes reacted with growth, expecting a rapid recovery in the US economy amid large-scale stimulus measures. The yield on US government bonds decreased, putting significant pressure on the dollar.
The pandemic of COVID-19 remains a deterrent to the market. Many countries record an increase in infections, linking this to the beginning of the third wave of the pandemic. The concerns about the AstraZeneca vaccine are heightening. Many countries have banned the use of the vaccine for specific age groups.
US - CPI data for March
In March, many investors relied on the growth of inflation pressure in the United States in the medium and long term. To curb inflation, the Fed was expected to move into the monetary tightening phase sooner than expected. These expectations led to a sharp increase in the yield on long-term US government bonds and a strengthening of the dollar.
Last week, Federal Reserve tried to dispel speculation about the earlier curtailment of incentive monetary policy. Jerome Powell said the short-term price index hike is not a problem for the Fed, and the regulator does not intend to change its monetary policy for a long period of time.
Powell's statements somewhat reduced the importance of upcoming CPI data to the market, but investors will still closely monitor the statistics. The growth of CPI indicators is likely to support the dollar and could lead to a resumption of growth in the yield curve of long-term US government bonds.
US - retail sales for March
In February, retail sales data disappointed investors quite a lot. Experts predicted a decrease of 0.5%, while the real figure was significantly lower than the forecast - 3.0%.
In March, the market expects a 4.7% recovery in retail sales amid an improvement in the pandemic situation and the adoption of a large-scale stimulus program in the United States. The dollar's response will depend on the extent to which actual values deviate from forecast levels.
China is a big block of important macroeconomic statistics
The market has high hopes for the US economy, but so far China remains the main driver of the world economy. The country responded very quickly and effectively to the threat of the pandemic. COVID-19 The centers of infection were quickly localized, and throughout the year the Chinese economy is showing a high rate of recovery. Previously published data on PMI, CPI and PPI indicate a continuation of the positive trend and the recovery of the Chinese economy.
On Friday, China will publish the first GDP growth data for 2021. Annual GDP growth in Q1 is expected to slow from 6.5% to 6.1%, and industrial production growth in March will slow from 35.1% to 15.6%.
Data at or above the forecast could significantly support key stock indices. The data below forecasts are likely to discourage investors from risky assets.