The two-day US Federal Reserve meeting will set the agenda for markets around the world in the coming week.
Currencies, commodities, bonds and equities will all take their lead from what the greenback does as the Fed meeting approaches, and then after the post meeting statement is released early Thursday morning, Australian time.
Investors will closely scrutinise that post-meeting statement for any new sign on the timing of the first US rate rise since late 2008.
Outside of the Fed’s meeting in Washington, attention will centre around the UK budget (Wednesday night our time), Israeli elections (tomorrow our time) and more talks over the Iranian nuclear program which started at the weekend in Switzerland.
Besides the Fed’s meeting, other central banks will be active.
In Australia the RBA Minutes of its last meeting will be released; Germany’s Bundesbank releases its Monthly Report for March, the Bank of Japan announces its latest monetary policy decision; the Bank of England publishes minutes from its latest monetary policy meeting; Iceland’s Central Bank announces its latest monetary policy decision; the European Central Bank’s Governing Council meet, but no interest rate decision is scheduled, the ECB also releases its monthly bulletin; and the Swiss National Bank announces its latest monetary policy decision, while Norway’s central bank also holds an interest rate meeting.
In the US the markets want the Fed to remove the word ‘patient’ from its post-meeting policy statement, signalling the first rate rise could come in the next few months.
Fed chairwoman Janet Yellen will testify following the release of the statement at the normal quarterly media conference.
Quarterly forecast for growth, inflation and employment will also be considered at the meeting and released afterwards.
June remains the best bet after the strong jobs data for February and a fall in the jobless rate to 5.5% convinced investors the Fed would move sooner, not later.
But many in the markets continue to believe that increase will come in September or October.
As well as the Fed meeting some important monthly stats will be issued, starting with the New York and Philadelphia Fed manufacturing conditions indices (Monday and Thursday respectively), industrial production, the NAHB home builder survey and housing permits and housing starts (all due tonight).
The US fourth quarter earnings season has largely drawn to a close, with just three S&P 500 listed companies yet to report. In the coming week the multinational jeweller Tiffany and Co reports.
First quarter results (for January or February balance dates) will also start to trickle out, with figures from Federal Expresss, Nike, Oracle, Lennar, General Mills, Adoble and Guess.
Outside of the US, financial reports are due from BMW, Petro China, Renren, Porsche, Enel, Cathay Pacific and China Mobile.
In Australia, there will be considerable interest in Myer’s interim figures on Thursday after the surprise change in CEO earlier this month.
The struggling department store chain is expected to reveal very poor first half figures, and possibly a reduced dividend.
Otherwise, it will be a quiet week on the data front with focus back on the RBA with the minutes from its last Board meeting (Tuesday) expected to confirm that the RBA retains an easing bias and speeches from two senior Reserve Bank officials this week.
Later this morning, Guy Debelle the Assistant Governor for financial markets, addresses a financial conference in Sydney.
And on Friday, Governor Stevens makes a speech that will be watched for any clues on the interest rate outlook.
Also on Thursday the Reserve Bank will release its quarterly Bulletin, a publication that contains topical articles on the economy.
In Asia, it will also be quiet with Japanese trade figures for February the major release, along with figures on foreign investment in China.
In the UK, the final budget before the May poll from the chancellor of the exchequer George Osborne on Wednesday night is expected to reveal tax cuts and a new tax on multinational companies which don’t pay full tax rates.
And Israelis go to the polls tomorrow in a hotly contested election between prime minister Benjamin Netanyahu and Isaac Herzog, Israel’s centre-left opposition leader. Mr Herzog is now the front-runner in the election with polls last week showing his party, the Zionist Union, ahead by a margin of three to four seats.
A loss by Netanyahu’s party Likud and a breakthrough in the Iran talks in Switzerland could change thinking about the middle east and see more Iranian crude oil reach the global market, sending oil prices even lower.
