The week ahead is full of potentially market-moving events. From the Ukraine-Russia conflict to the Fed’s meeting minutes, here is what investors in the equity market should be aware of.
Next week is market by important events that may move financial markets. The equity markets, in particular, are susceptible to having to deal with a rise in volatility.
Both geopolitical and economic events are closely watched. Investors are aware of the importance of geopolitical developments, as last Friday, with a few hours left in the trading week, news that an invasion of Ukraine by Russia is imminent triggered a massive risk-off reaction.
Besides geopolitics, here is what else matters in the week ahead:
- Fed’s emergency meeting
- Fed’s Bullard interview with CNN
- UK and Canadian CPI
- US retail sales
The tensions between Ukraine and Russia reached a new level recently. The diplomatic efforts failed to reach a mutually agreed solution, and so the previous trading week ended with a warning from US intelligence that an invasion of Ukraine by Russia was imminent.
As a consequence, the US equity market sold off, immediately triggering a risk-off movement across financial markets.
Fed’s emergency meeting
Fed has scheduled an emergency meeting for tomorrow. Whispers in the market call for the Fed to hike earlier than scheduled due to inflation reaching 40 years high and the Fed losing its credibility. Emergency hike or not, one cannot ignore this meeting as it is unusual and can influence the markets.
Fed’s Bullard interview with CNN
Still on Monday, the Fed and FOMC member Bullard is scheduled to do an interview with CNN on monetary policy. This is one member that shocked the markets last week stating that a 50bp rate increase should not be discounted in March and that 100 bp by June is not out of the question.
UK and Canadian CPI
The week ahead brings the inflation data in Canada and the UK. The trend seen in the US will likely be similar in these two countries as well, as the largest economy in the world exports inflation to its trading partners.
Higher than expected inflation may affect both the UK and the Canadian stock markets.
US retail sales
On Wednesday, the US retail sales data for January will tell us the shape of the US consumer. The market expects retail sales to increase by 1.8% MoM.