Federal Reserve


The US Federal Reserve is widely anticipated to raise interest rates again this week, the first of three or even four hikes forecast in 2018. Inflation has picked up and minutes from the January FOMC meeting revealed more bullishness on the US economy. Jay Powell, who will preside over the meeting as chair for the first time, told Congress that economic conditions have picked up since the end of last year.

With a hike all but a done deal, the focus for traders will be fresh economic projections and the so-called dot plot, which details where policymakers expect rates to be over the medium term. If consensus points to four hikes in 2018 this could unnerve markets and support the USD.

However, there may yet be some concern about the durability of inflationary pressures. While the January CPI was well ahead of forecast, and came off the back of that average earnings print of 2.9% which spooked markets, the latest inflation and wage data has been a bit less bullish. For the dots to move up significantly it would require a pretty big shift among the FOMC’s centrists. And with concerns about a flattening yield curve - when short term rates start to close the gap with longer-dated yields - the FOMC may be minded to stay relatively cautious. Indeed with markets well primed for 3 hikes this year, it does not need to rock the boat. Markets will also be closely attuned to the press conference with Jay Powell after the release, his first time facing the press in his new capacity as Fed chair..

Bank of England

No hike expected but the meeting should offer markets further details on how close the Monetary Policy Committee is to raising rates to 0.75%. May is currently the favourite for the second post-Brexit rate rise, although with inflationary pressures seen ebbing, Brexit uncertainty undiminished and lacklustre growth forecast by the OBR and others, policymakers may wish to play down expectations for further tightening in the near future and instead focus on the medium to longer-term outlook.

UK inflation, earnings and retail sales

Coming during Bank of England these key releases for the UK economy may well be market-moving. Inflation is due on Tuesday, before the Bank’s meeting, and is likely to overshoot and hold around the 3% mark. Earnings have shown signs of picking up with economists forecasting a return to real wage increases some time in 2018. We will get the feel for how close this tipping point is on Wednesday, along with unemployment figures.

The most interesting data this week may well be retail sales. There has been something of a retail bloodbath of late as a number of firms have entered administration off the back of a combination of weaker consumer spending, higher costs and structural shifts in the marketplace. The health of the UK retail sector will be made apparent on Thursday.

Eurozone flash PMIs


Euroboom continues: the next round of flash purchasing managers’ surveys ought to confirm the Eurozone economy is in fine fettle. However, the last round released in February, though still very robust, indicated that the acceleration in growth may have peaked. Business activity rose at a robust clip in February, but the rate of expansion was down from January’s 12-year high. The Manufacturing PMI slowed to a four-month low of 58.5, from 59.6 in January, while the Services PMI fell to 56.7 from 58.0. The Composite PMI fell to 57.5 from 58.8.

Further softening, albeit from the exceptionally firm readings prior, may just cast a bit of doubt on the durability of the economic recovery without stimulus from the European Central Bank.

Economic Calendar

(All times GMT)


Monday, 19 March

09:00 – Italian industrial production

10:00 – Eurozone trade balance


Tuesday, 20 March

00:30 – Australia monetary policy meeting minutes, house price index

07:00 – German PPI inflation

09:30 – UK CPI inflation, PPI input inflation

10:00 – German ZEW economic sentiment


Wednesday, 21 March

09:30 – UK average earnings, unemployment rate

12:30 –US current account

14:00 – US existing home sales

14:30 – US crude oil inventories

18:00 – FOMC statement, Fed funds rate, economic projections

18:30 – FOMC press conference

20:00 – New Zealand cash rate, RBNZ rate statement


Thursday, 22 March

00:30 – Australia employment change, unemployment rate

00:30 – Japan flash manufacturing PMI

08:00 – French flash manufacturing & services PMIs

08:30 – German flash manufacturing & services PMIs

09:00 – Eurozone flash manufacturing & services PMIs

09:30 – UK retail sales

12:00 – Bank of England rate decision, monetary policy summary

14:45 – US flash manufacturing & services PMIs

23:30 – Japan national core CPI


Friday, 23 March

12:30 – Canada CPI inflation, retail sales

12:30 – US core durable goods orders

Corporate Calendar


Tuesday, 20 March

FedEx Corp (FDX) – Q3/2018, EPS estimate 3.105

Ocado Group plc (OCDO) – trading update

Wood Group (John) Plc (WG.) – final results

Polypipe Group plc (PLP) – final results

Hansteen Holdings (HSTN) – final results

Bellway plc (BWY) – interim results


Wednesday, 21 March

NIKE (NKE) – Q3/2018, EPS estimate 0.528

International Public Partnerships Limited (INPP) – final results

Kingfisher (KGF) – final results

Vectura Group (VEC) – final results

Xaar (XAR) – final results

ScS Group Plc (SCS) – interim results

Softcat plc (SCT) – interim results


Thursday, 22 March

Allie Minds (ALM) – final results

Genel Energy plc (GENL) – final results

Lamprell Plc (LAM) – final results

Quixant plc (QXT) – final results

Safestyle UK plc (SFE) – final results

Sanne Group plc (SNN) – final results

Ted Baker (TED) – final results


Friday, 23 March

Next plc (NXT) – final results

Smiths Group (SMIN) – interim results


Sources: Bloomberg/Companies