Markets: What is most important in the week ahead? – Nordea Markets

Analysts at Nordea Markets point out that a lot of Fed speakers will have the chance to address the shaky global markets.

Key Quotes

“The FOMC meeting minutes on Wednesday will also shed some light on whether the balance sheet is already a topic within the FOMC. Judging from recent comments from Williams and Kaplan it may already have been a topic at the December meeting in contrast to the opinion perceived to be shared by Jerome Powell at the press conference. Given how tight the financial conditions have now become, we would not be surprised to see a further dovish rhetorical shift from FOMC members in coming weeks.”

“Also, the ECB monetary account is out on Thursday. Here we look for concessions on either TLTROs or the growth outlook in the Euro area. So far, the ECB has remained surprisingly upbeat (even though markets don’t buy into it), probably given the emerging signs of wage pressures in the Euro area.”

“Furthermore, we get the latest inflation reading from the US on Friday. Headline inflation could drop as low as 1.7%, while core inflation will stay around 2.2%. Given the usual relationship between oil/energy prices and market-based inflation expectations, further setbacks for market-based inflation expectations in general should be expected until summer, unless i) the growth outlook bottoms or ii) if European core inflation starts to surprise positively. Wage growth will likely continue upwards in the meanwhile.”