Not only in the U.S investors will be closely following the news since inflation reports will be published in many countries. We start off on Tuesday with UK’s CPI and Core CPI reports. CPI in the UK remains stable but the recent interest rate cut by 25 bp can cause inflation to slightly increase in the near future. Also on Tuesday, we will get to know the PPI in U.S. and according to forecasts it is expected to decrease (forecast: 0.2%, previous: 0.8%). CPI inflation is also expected to show a decrease (forecast: 0.2%, previous: 0.8%). It seems that inflation can be under control.

On Wednesday, inflation reports (CPI) will be published in the Euro zone, Germany and New Zealand. Especially worth attention is that last country since CPI is expected to increase to 1.0% from 0.5%. Interest rates are pretty high (at 8.25%) but higher inflation can cause further interest rates hikes. 

Most of this week’s reports focus on inflation but there other that investors should focus on. On Wednesday, U.S’s industrial production report will be published (forecast: -0.1%, previous: 0.3%) and crude oil inventories. Those can affect oil prices. On Thursday, investors will get news from the U.S housing market with the Housing Start and Building Permits publications (both are forecasted to decrease..again!). Also worth attention should be Ben Bernanke’s, Fed’s Chairman, speech. Federal Reserve Chairman Ben Bernanke will testify about the US economic outlook before the US House of Representatives Committee on the Budget, in Washington DC. At the end of the week, the University of Michigan’s Consumer Confidence Index will be published.

Due to the importance of the reports being published this week, big changes can be expected on currency and stock markets.

Adam Narczewski