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Week Ahead: US data in the spotlight after Yellen's remarks

Investors are likely to pay even more attention than usual to data from the US next week, given the market nervousness that was prompted by just three words from Federal Reserve chair Janet Yellen.

 

by Daniel Grote on Mar 21, 2014 at 18:13

Week Ahead: US data in the spotlight after Yellen's remarks

Investors are likely to pay even more attention than usual to data from the US next week, given the market nervousness that was prompted by just three words from Federal Reserve chair Janet Yellen.

Yellen’s hint that US interest rates could rise ‘around six months' after the Fed had put an end to quantitative easing has thrown the US economic recovery firmly back into the spotlight, no matter how much she attempted to strike a dovish tone.

This week will bring a slew of data from across the pond, starting on Monday when flash Purchasing Managers Index (PMI) figures are released. Last month’s US manufacturing PMI was the highest since May 2010, after rebounding from January figures which suffered from the effects of the weather. Monday’s data will give investors a better idea of whether that blip was just down to the New Year freeze or the sign of a more worrying economic trend.

An upwards revision of US growth in the last quarter of 2013 is on the cards for Thursday. Previously growth had been revised from an annualised rate of 3.2% to 2.4%, and economists polled by Reuters are predicting a further revision to 2.7%. The release of US durable goods orders numbers on Wednesday and personal income and spending data on Friday will provide more indications of growth in the first quarter of this year.

Also on Friday, the Office for National Statistics (ONS) will publish its third estimate of UK economic growth in the last quarter of 2013, which is expected to remain unchanged at 0.7%. Robust growth is anticipated for the first quarter of this year, and ONS data on January services sector growth and retail sales is likely to provide evidence of this when it is published on Thursday.

Eurozone flash PMI figures on Monday will also be closely watched. February’s PMI was at a 32-month high, and was cited by European Central Bank president Mario Draghi as a reason why he felt comfortable resisting cuts to interest rates. And the data for China could provide evidence of further weakness: last month’s figure revealed a further deterioration in manufacturing conditions and Monday should provide some evidence of whether more momentum has been lost.

FTSE Diary:

Companies that are due to provide financial updates this week:

Tuesday: EasyJet 2013 results, Kingfisher 2013 results, Wolseley 2014 half-year results.

Wednesday: APR Energy preliminary results, Bellway 2014 half-year results.

Thursday: Afren preliminary results, Compass trading update, Daily Mail & General Trust trading update, Thomas Cook Group trading update. 

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