US economy

Week ahead: Brexit, Fed and BoE rate decisions


While investors continue to look for a breakthrough in US-China trade talks, they will get a healthy dose of central bank developments next week with rate decisions on tap for both the Federal Reserve and Bank of England.

Here’s what to watch:

Central banking

The Fed’s policy-setting board is widely expected to hold interest rates steady when it concludes its two-day meeting on March 20. But economists believe that the central bank could announce a plan to end the wind-down of its balance sheet on the day of its rate decision, a move that could have a ripple effect in the market.

Officials will also update their projections for interest rates, potentially lowering forecasts for further tightening this year amid a wait-and-see approach adopted in January. The Fed has signalled that it will be patient as it considers more interest rate increases, reacting to muted inflation and slower economic growth.

Fed chair Jay Powell will hold a news conference in Washington following the meeting.

Like the Fed, the BoE is expected to maintain its current target for interest rates. It will announce its decision on March 21.

Central banks in Brazil and Russia, among others, also have interest rate decisions coming up.

Brexit and trade

EU leaders are scheduled to meet in Brussels for a two-day meeting starting March 21, and Brexit will be the top issue.

The UK parliament recently struck down a revised withdrawal agreement presented by Prime Minister Theresa May. In later votes, MPs rejected a no-deal Brexit and voted to request an extension to the March 29 deadline. Mrs May has called for a third “meaningful vote” on her Brexit deal on the eve of the Brussels summit.

In other geopolitical news, Chinese president Xi Jinping will visit Italy, where Prime Minister Giuseppe Conte may sign framework infrastructure agreements related to China’s “Belt and Road” plan. Mr Xi will also travel to France.

Mr Xi’s trip to Europe will come as US President Donald Trump said a trade pact between the two countries won’t be finalised until the two leaders meet.

On whether the US and China can come to an agreement, Mr Trump said on Thursday: “Probably one way or the other we’re going to know over the next three or four weeks.”

Earnings and economy

There are several notable corporate earnings reports due out in the coming week. FedEx, seen as a US economic bellwether, will report financial results on March 19. Sportswear giant Nike, sports car maker Porsche, packaged foods company ConAgra and jeweller Tiffany will also report earnings.

Key economic data will include UK jobs, consumer prices and retail sales; Japanese consumer prices; Canadian consumer prices and retail sales; German producer prices; and US factory orders and existing home sales.

Also in the US, office workers around the country will be surreptitiously watching college basketball on their computer screens. The NCAA tournament known as March Madness begins on March 19.

Keeping with the sports theme, the Formula 1 season kicks off March 17 with the Australian Grand Prix.



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