A preview of the day ahead in the European and global markets of Ankur Banerjee
Investors found their appetite for risky assets at the start of a crucial week, shrugging off disappointment with China setting a modest economic growth target this year, with European equities set to continue their momentum.
After its best weekly performance since the start of the year, the continent-wide STOXX could aim for a new high as traders await January retail sales data for the Eurozone later today.
Meanwhile, the market is firmly focused on Fed Chairman Powell’s two-day testimony to the US Congress (Tuesday and Wednesday) and the February jobs report (due Friday) which will likely dictate the course of the US central bank in the near future. .
As investors have come to (sort of) accept that the Fed will likely keep interest rates higher for longer, there are new fears that strong economic data will lead the central bank to return to massive hikes. .
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The hawkish rhetoric from Fed speakers continued over the weekend, with San Francisco Federal Reserve Chair Mary Daly being the latest to issue a warning about the inflationary threat.
The market largely expects Powell to be hawkish this week, but given his testimony comes before the jobs report is released, he’ll likely aim to keep all options open.
In China, the country’s leaders set a 5% economic growth target this year, which analysts called conservative and pragmatic, as they kicked off the annual session of the National People’s Congress.
In the business world, Italy’s state-owned lender CDP has bid for the landline network of former telephone monopoly Telecom Italia, rivaling an offer from US firm KKR.
Key developments that could influence markets on Monday:
Economic Events: Eurozone January Retail Sales, February S&P Global PMIs for Germany, France and the Eurozone
Speakers: Philip Lane, ECB Chief Economist
Reporting by Ankur Banerjee; Editing by Edmund Klamann
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