Equity markets investors were glad to hear Fed’s Chairman, Ben Bernanke, words that the U.S central bank would do anything to avoid recession. That means further interest rate cuts. Stocks rallied but were stopped on Friday by a dramatic drop of the University of Michigan Consumer Sentiment Index. What will the upcoming week bring us?

Due to the President’s Day holiday, no macroeconomic news are expected from the United States. Stock exchanges will be closed for the day. Interesting things will be going on in Canada though. Mark Carney, the newly appointed Bank of Canada’s Governor will deliver a speech entitled “The Implications of Globalization for the Economy and Public Policy" at the British Columbia Chamber of Commerce and the Business Council of British Columbia, in Vancouver. Investors playing on the CAD will certainly need to pay attention to what the new governor has to say, maybe in regards to the future monetary policy of the Canadian central bank. Tuesday will be poor in macro publications. Again, Canada will be on the spot with the CPI report. Also, minutes from the last monetary policy meeting will be published in Japan.

Wednesday will bring reports that investors’ hearts should beat faster. We will start the day with the UK Monetary Policy Council minutes from their last meeting, where interest rates were kept unchanged at 5.25%. But for he first time this week, the U.S will be back on the scene. With great attention investors will await the CPI publication. Also important will be FOMC meeting minutes. In my opinion we should focus on the U.S housing market reports being published that day – housing starts and building permits. I am one of those that is looking for signals that the housing sector is finally rebounding. I am pretty sure that it is not going to happen so soon, but I want to see some improvement. Good news from the U.S housing sector can bring optimism back on the financial markets.  

The end of the week will be less nervous. Some emotions can cause the British retail sales publication or Governor’s Fukui (head of Bank of Japan) speech at a business seminar in Tokyo. I would rather pay attention to the U.S crude oil inventories report. Prices of oil seem to be very sensitive to this publication recently. Also worth attention will be the U.S unemployment claims publication. The American labor market is in a small crisis right now so this report can have some effect on the markets. On Friday investors can be getting ready for the weekend since the only publication I would pay attention to would be the Canadian retail sales. Plenty of news from Canada this week eh?

As for polish investors, they will need to follow global news. Those and mood investors determines the movements of domestic equities and the Złoty. Tuesday will be the only day that reports from the domestic market will be published. At 14:00 CET the PPI (expected drop to 2.3% from 2.5%) and the Industrial Production (forecasted increase from 6.2% to 6.6%) reports will be announced.  We will see how the Polish economy is doing. In my opinion, not so bad as some are thinking. Just the influence of global economic events (and what follows, investors mood and risk aversion), that the stock market and the Złoty react stronger to those rather than to domestic macroeconomic publications.  

Adam Narczewski