GEMFOREX - weekly analysis

After a relatively quiet week from a news release point of view, we now enter the third week of February. Here are the top 5 things to be on the lookout for this week.

1. CPI data (14.02)

Investors keenly await Tuesday's CPI figures for signs that inflation is continuing to moderate. Following the recent release of strong jobs data, markets have to readjust expectations regarding how high the Fed may need to raise rates this year.

Inflation had risen in December, instead of falling as previously estimated, and data for the prior two months were also revised up, as shown by the Labor Department's annual revisions.

A strong inflation pattern could force markets to reassess whether the Fed will actually cut rates by year-end, which could hurt a rally that has boosted stocks and bonds after last year's collapse.

The economic calendar also features data on January retail sales, PPI data, and the weekly report on initial jobless claims.

Various Fed officials are due to make appearances during the week, including New York Fed President John Williams and Philadelphia Fed President Patrick Harker.

2.Earnings winding down

The Nasdaq posted its first weekly fall for this year last week, down 2.41%, while the S&P 500 ended the week lower by 1.11% and the Dow Jones lost 0.17%, in a week dominated by hawkish commentary from Fed officials and earnings reports.

More than half of the firms listed on the S&P 500 have reported earnings, with 69% beating profit estimates for the quarter, according to Refinitiv data.

Notable earnings in the week ahead include Coca-Cola (NYSE: KO), which is due to report ahead of the opening on Tuesday. Barrick Gold (NYSE: GOLD), Kraft Heinz (NASDAQ: KHC), Krispy Kreme (NASDAQ: DNUT), and Biogen (NASDAQ: BIIB) are all set to report before the opening on Wednesday while Deere (NYSE: DE) will report before Fridays market open.

3.U.K. data (14.02 & 15.02)

U.K. inflation and jobs data this week will help the Bank of England determine its course regarding a rate decision in March.

The BOE has said that Februarys 50 basis point rate hike may have been the last in its current tightening cycle, however, January's inflation report on Wednesday is expected to show price increases still in double digits.

Meanwhile, Tuesdays jobs report is expected to show that wage growth is continuing to rise, keeping pressure on the BOE, and January retail sales data on Friday is expected to show another decline.

The BOE forecast last week that Britain would enter a shallow but lengthy recession, starting in the first quarter of this year and lasting five quarters.

4.Bank of Japan

On Tuesday, Japan's government is set to officially nominate an unexpected candidate to replace Haruhiko Kuroda. His decade as Bank of Japan governor ends soon.

The yen initially moved higher following reports on Friday that Kazuo Ueda, a 71-year-old former member of the BOJ policy board, will be nominated.

However, once he expressed support for the BoJs current position, the currency lost some of its gains.

Whether or when and how the BOJ adjusts its policy stance is one of the major questions facing markets internationally this year. BOJ watchers suspect its ultra-loose monetary policy is likely to shift as inflation moves higher.

Ueda is considered an expert on monetary policy; however many analysts have stated that his appointment was totally unexpected and could be seen as a move to stop ultra-low interest rates sooner than initially expected.

5.Eurozone (14.02 & 15.02)

The European Commission will release quarterly economic forecasts for the euro area on Wednesday. Before that, the Eurozone is to release revised GDP data on Tuesday.

European Central Bank President Christine Lagarde is due to testify on the bank's annual report before the European Parliament in Strasbourg on Wednesday.

Other ECB officials due to make appearances during the week include Chief Economist Philip Lane and Vice President Luis de Guindos.

Trade Different With GEMFOREX