Highlights
For this week, market participants will look for any indications of the timing and pace of rate cuts in Wednesday's FOMC minutes of the Jan. 30-31 meeting amid persistent consumer inflation pressures. The Bank of Canada is not in a hurry to lower interest rates, either, as largely flat economic growth has shown some resilience and consumer inflation remains sticky above its 2 percent target, which is expected to be confirmed in Tuesday's CPI data.
In Asia, trading in the Chinese markets will resume after the lunar new year holidays while investors will be watching the performance of the Nikkei stock index that last week flirted with its record high hit in the asset bubble days of 1989 despite news of a technical recession in the world's fourth largest economy. Given the volatile nature of Japan's GDP data, however, the slight fourth quarter contraction can be easily revised up to modest growth and would not stop the Bank of Japan board from planning to lift the negative overnight rate target in coming months. For its part, the Bank of Korea is likely to maintain its policy interest rate at the current restrictive level this week to help anchor inflation.
On Monday, the US markets are closed for the Washington's Birthday holiday and Canada is closed for Family Day.
The Reserve Bank of Australia will release the minutes of its Feb. 6 meeting at 11:30 a.m. AEDT Tuesday (7:30 p.m. EST Monday/0030 GMT Tuesday). At the meeting, the RBA left its policy rate at 4.35 percent for a second straight meeting, as expected, after raising it by 25 basis points to 4.35 percent from 4.10 percent in November and having left rates on hold at its previous four meetings. Inflation has continued to ease but remains high at 4.1 percent, the RBA said, adding that the board expects it will take some time before inflation is sustainably in the target range of 2 to 3 percent.
The People's Bank of China is expected to hold their 1-year loan prime rate steady at 3.45 percent but cut the 5-year rate by 5 basis points to 4.15 percent to help lower borrowing costs for businesses.
In Asia, trading in the Chinese markets will resume after the lunar new year holidays while investors will be watching the performance of the Nikkei stock index that last week flirted with its record high hit in the asset bubble days of 1989 despite news of a technical recession in the world's fourth largest economy. Given the volatile nature of Japan's GDP data, however, the slight fourth quarter contraction can be easily revised up to modest growth and would not stop the Bank of Japan board from planning to lift the negative overnight rate target in coming months. For its part, the Bank of Korea is likely to maintain its policy interest rate at the current restrictive level this week to help anchor inflation.
On Monday, the US markets are closed for the Washington's Birthday holiday and Canada is closed for Family Day.
The Reserve Bank of Australia will release the minutes of its Feb. 6 meeting at 11:30 a.m. AEDT Tuesday (7:30 p.m. EST Monday/0030 GMT Tuesday). At the meeting, the RBA left its policy rate at 4.35 percent for a second straight meeting, as expected, after raising it by 25 basis points to 4.35 percent from 4.10 percent in November and having left rates on hold at its previous four meetings. Inflation has continued to ease but remains high at 4.1 percent, the RBA said, adding that the board expects it will take some time before inflation is sustainably in the target range of 2 to 3 percent.
The People's Bank of China is expected to hold their 1-year loan prime rate steady at 3.45 percent but cut the 5-year rate by 5 basis points to 4.15 percent to help lower borrowing costs for businesses.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
