Investors are in for a busy week, jam packed with plenty of economy releases and speeches from central bank officials, including Federal Reserve chair Jerome Powell and Bank of England (BOE) governor Andrew Bailey.
The focus will remain on bonds as global financial markets gauge how high treasury yields can rise. They rose to a 13-month high earlier last week.
Things will kick off on Monday with the start of the Bank of International Settlements’ Innovation four-day summit, that will feature key appearances by Powell, Bailey and European Central Bank's (ECB) Christine Lagarde.
The trio's speeches will particularly interest investors as they watch for insights into the policy decisions announced by the Fed, BoE and ECB this month.
Wednesday will see key economic releases including a raft of preliminary Purchasing Managers Indices (PMIs) for factory and services activity in the UK, Eurozone and US.
A host of releases are on the slate for the UK, including employment figures, a reading on consumer prices and retail sales.
Important developments over the weekend:
UK: Employment figures, PMIs, Bailey speech, CPI, retail sales
First up BoE governor Bailey on Tuesday and Thursday. It comes after the UK central bank held interest rates at 0.1% last week.
The Bank’s monetary policy committee also left its £895bn ($1.24tn) quantitative easing programme unchanged, meaning it will continue to buy up to £875bn of UK government bonds (and hold £20bn of corporate debt).
Investors will watch for anything that may shed light on the BoE’s plans in terms of rising bond yields.
Tuesday will see the release of the jobs report, which could reflect the impact of last month’s better than forecast claimant count change reading on the unemployment rate.
February’s Inflation reading — which stood at 0.7% last month — is out on Wednesday, along with flash manufacturing and services PMIs for March, which came in at 55.1 and 49.5 respectively in February.
Closing out a busy week, on Friday the retail sales data for February is on the slate, looking to bounce back after a 8.2% contraction in January.
But, there are expectations that things will look brighter on the back of the UK's vaccine rollout and better than expected GDP numbers for January.
"The biggest drag on retail sales will continue to come from the closing of bars and restaurants, which are set to see extremely subdued levels of activity, though as recent retail numbers have shown the boom in online and digital sales is helping compensate in other areas," chief market analyst at CMC Markets, Michael Hewson said.
Key company results:
Kingfisher (KGF.L) — full-year (Monday)
IHS Markit (INFO) — Q1 (Tuesday)
YouGov (YOU.L) — half-year (Tuesday)
Bellway (BWY.L) — half-year (Wednesday)
Cineworld (CINE.L) — finals (Thursday)
US: Powell speeches, personal spending and consumer sentiment data
Federal Reserve chair Powell will be in the spotlight this week as he is due to make a few appearances, two of which will be with US treasury secretary Janet Yellen.
Powell is expected to partake in a virtual panel hosted by the Bank for International Settlements on Monday. On Tuesday and Wednesday he testifies, alongside Yellen, in front of the House Financial Services Committee and the Senate Banking Committee respectively.
There will be a lot of attention on the bond market, especially following the central bank's decision to end emergency capital relief to banks, which throws the upcoming Treasury auctions into focus. If bank interest is low, the bond market selloff could intensify, which could eventually skyrocket already rising Treasury yields.
Data wise, there is the existing home sales reading on Monday, flash manufacturing and services PMIs on Wednesday and the final fourth quarter GDP reading as well as jobless claims figures on Thursday.
On Friday, there is a slew of data on the slate, personal income, personal spending and consumer sentiment, along with core PCE price index.
Eurozone: Region-wide flash PMIs, Lagarde speech, coronavirus
European countries have had a bad week, especially amid rising coronavirus cases, which have raised concerns of a third wave on the continent as well as vaccine issues.
The reality of a third lockdown is more and more likely for countries such as France, the Netherlands and Italy, triggering fresh restrictions in several EU countries, with France going into its third lockdown across 16 regions, including Paris.
The continent has been in an uphill battle with its vaccination programme amid various delays and shortages.
But on Friday, several EU countries restarted the rollout of the Oxford-AstraZeneca (AZN.L) COVID-19 vaccine after the EU medicines regulator deemed it “safe and effective", but a number of Scandinavian nations have decided to keep the jab on hold amid blood clotting concerns.
ECB president Lagarde is due to appear at the Bank of International Settlements’ Innovation four-day summit on Wednesday, with any comment regarding rising yields potentially hitting a fragile euro (GBPEUR=X).
Outside of the pandemic and the ECB there is the region-wide current account figure on Monday, the flash manufacturing and services PMIs on Wednesday, and the German Ifo business climate number on Friday.
Manufacturing in the region has continued to show strong expansion, with Germany outperforming.
However, various lockdown restrictions have meant the Europe's two biggest economies, Germany and France have struggled as the hospitality sector was shuttered.
In Germany the services sector has been in contraction for five consecutive months, while in France it has been underperforming for six months in a row. But the picture continues to look bleak for March as France has entered a third lockdown and vaccine rollout programme in both nations far behind schedule.
Additionally, the German cabinet is also due to sign off on a budget plan for 2022.
Watch: What is inflation and why is it important?