Looking ahead to this week, the UK starts a busy week with Tuesday’s release of the CPI report for February.
Higher energy and food costs coupled with the VAT increase impact are expected to push the headline inflation rate even further away from the Bank of England’s 2% target.
Wednesday brings two important releases with the minutes from the last Bank of England policy committee meeting being published. Market watchers will await the voting pattern keenly to judge whether the tone of the meeting focussed on a rate increase soon or if the committee continue to refuse in being drawn on any concrete plans.
The Chancellor of the Exchequer also presents the 2011 budget on Wednesday. Markets will be watching for any economic forecasts in addition to explanations for any increases of taxes.
Many of the headline numbers were laid out in the Autumn Spending Review, but as per most Budget’s, surprises are expected.
Focus on the Asian markets, particularly the Japanese Yen follows last week’s co-ordinated round of intervention from the G7, with events in Japan as well as geopolitical risks likely to keep markets volatile.
There is little data of significance in the US this week with Friday’s final GDP figure, which will of course be noted for any revisions from the previous estimates, being the main highlight in an otherwise scant release schedule.
Ben Bernanke will be speaking on Wednesday and the markets will be watched closely for any indication about policy on rates from the Fed.
In the euro zone, the Markit flash PMIs for March should provide further insights into the pace of economic activity in Q1.
Both the manufacturing and services indices are expected to come down a little from February’s strong readings. Other data of significance is the German Ifo Index which is expected to slip from February’s record high reading of 111.2 but again remain at what are historically high levels.
