Summary:

• EU finance ministers will meet to discuss developments in Greece case

• US inflation data will be crucial this week

• Monthly industrial and retail sales reports from China to be released on Wednesday

As usual Monday is calm in terms of the macroeconomic data. We do not have any top tier releases in today’s calendar. However, European investors may find interesting the EU finance ministers meeting, that is scheduled for 10:00 am BST, as they will discuss the newest developments in Greece case as well as deepening of the Economic and Monetary Union ahead of Euro Summit. Moreover, discussion concerning inflation and exchange rate developments is also planned.

What to watch for the remainder of the week?

The first FOMC meeting with Jerome Powell at the helm is still a week away but this week we’ll get final updates that may fine tune the message. Inflation print is the most relevant on the long list of reports as it will indicate a degree of a pressure on the new chairman to raise rates. Oil traders are increasingly focus on the US output that’s been growing robustly and the DOE report will be viewed from that angle while we will also get an update from the Chinese economy.

The US data: CPI inflation (Tuesday), retail sales and PPI (Wednesday), NY/Philly Fed indicators (Thursday), industrial output and housing starts (Friday)

A list of the US reports for the next week is really long, making up for a good update ahead of the March FOMC meeting. However, it looks like 80% of the focus will be on the inflation report. Investors are aware that the US economy is in a good shape and they are OK with some interest rate increases as a side product of a sound economy. However, accelerating price pressure could push the Fed towards a “4-hikes in 2018” scenario and that would be scary for some. Therefore expect a lot of attention to the report on Tuesday. The consensus sees inflation at the January level of 2.1%. Affected markets: EURUSD, US500.

The DOE report on inventories (Wednesday, 2:30pm GMT)

The oil market seems to be stuck between the OPEC efforts to stabilize the market and the strong economic growth on the upside and a booming shale sector in the US on the downside. It looks as if shale producers have already fully recovered from a period of low prices and are expanding their operations at a brisk rate. The US output increased above 10.3mbd last week and investors will pay attention to this number again. Affected markets: OIL, OIL.WTI.  

Monthly reports from China (Wednesday, 2:00am GMT)

Markets have become relaxed about China since the mini crisis from 2015/16. However, let us not forget that after consolidating his power, president Xi Jinping could push for more structural reforms even at the cost of present growth. Inflation in February caused an unpleasant surprise with a spike from 1.5 to 2.9% and if that is accustomed with slowing real economy, markets could be concerned. Reports for this week include industrial output (consensus +6.1% y/y) and retail sales (9.9%). Affected markets: AUDUSD, CHNComp.

EURUSD found solid ground in the vicinity of 1.2300 after declining in the previous week. Will data from the US help greenback strengthen further this week? Source: xStation5