The last week of January will see a number of important economic events and data that will affect market movements. This week's focus will be on the Fed meeting, which will be the last under the leadership of Janet Yellen, before Jerome Powell takes over.
Here are the highlights of these events and data that may affect markets:
Monday - Consumption expenditure in the US
The most significant indicator on the economic calendar today is the Core Personal Consumption Expenditure Index, which is the preferred measure of the Federal Reserve for inflation. It is expected to stabilize at 1.5% in December on an annualized basis, and the Fed wants inflation to reach 2% to continue monetary tightening initiated by the end of 2015.
Tuesday - Euro zone growth data
Growth data for the Eurozone is expected to be released for the last quarter of 2017, and GDP is expected to grow by 2.6% on a yearly basis, the same as in the third quarter of the same year.
German consumer price data for January is also expected to rise by 1.7% y/y, the same as in December.
Wednesday - FED Interest Rate Decision
Inflation data from Australia is expected to rise, with the consumer price index expected to rise by 1.7% in the last quarter of 2017 on a yearly basis, and by 0.7% on a quarterly basis. Inflation continues to be one of the reasons why the Australian Reserve is not starting to tighten its monetary policy.
Inflation data in the euro area will also be released for January, and the CPI is expected to show some slowdown, recording a 1.3% rise from 1.4% in December, staying away from the ECB target of 2%.
At the end of the day, the markets will be eyeing the Federal Reserve's interest rate decision which is expected to remain unchanged in range between 1.25%-1.50%. The meeting will be the last meeting of Janet Yellen as governor of the Federal Reserve before being replaced by Jerome Powell. Most expectations are that the Fed will raise rates at the March meeting and then in June and December.
Thursday - UK and US PMI data
UK manufacturing PMI data is expected to be released in January and is expected to record 56.6 points versus December's reading of 56.3 points.
Also, ISM Manufacturing PMI data is due to be released and is expected to slow to 59 in January from 59.7 in December.
Friday - US labour market data
The first Friday of each month is usually the date for the release of US labour market data. The US non-farm sector is expected to add about 180,000 jobs in January after adding 148,000 jobs in December and unemployment to be at 4.1%. Wages should rise by 0.3%, the same rate of increase as in December.
