Week ahead: UK GDP, ECB meeting and US inflation
It's another key week for central banks around the world as investors watch to see how officials manage the spectre of inflation.
The European Central Bank (ECB) meets on Thursday, while all eyes will be on UK gross domestic product (GDP) readings. There is also the first Bank of England meeting of the year this week.
Key data readings from the UK will also give a read on how acute the chaos has been so far from new regulations since the Brexit transition period ended.
A general sentiment check will also come from the US as investors look to see what an agreed stimulus deal alongside hopes of a rapid vaccine rollout will do to prospects of reopening the economy for good.
Developments from the weekend to watch next week:
European Union turns to US for Oxford/AstraZeneca COVID vaccine
Deliveroo pledges £50m COVID recovery fund ahead of multi-billion pound IPO
UK: GDP and a read on Brexit
The UK GDP reading for January will be in front and centre of investors' minds, and it will come as no surprise that it is expected to plunge due to coronavirus lockdowns.
Analysts at ING expect a 5% fall in GDP due to the wide-sweeping closures of non-essential retail and hospitality. Others polled by Investing.com expect a year-on-year fall of 7.8%.
ING analysts say that there could also be a hit from EU manufacturing trade terms and Brexit aftershocks, but the "jury is out" on how badly that will be affected, as firms' contingency stocks from stockpiling dry up. The trade balance reading will show just how badly (or well) things are going in that respect.
The UK is also preparing to phase in customs checks between April and July, meaning investment and hiring could be held back as business takes a wait-and-see approach.
Other key releases will come from the British Retail consortium's monthly sales monitor on Tuesday, a temperature check on the housing market from RICS on Thursday, and inflation on Friday.
It is also the first meeting of the year for the Bank of England's monetary policy committee, re-stoking the fires of the negative interest rates debates.
Watch: Will interest rates stay low forever?
Europe: ECB meetings and industrial production figures
The ECB meeting will take centre stage in planned eurozone business next week, a governments continue to grapple with both vaccine rollouts and getting a hold on the economic fallout of the virus.
There's little expectation of a change in tack. Lowering rates any lower could head into negative territory. However, just as Treasury yields in the US have climbed sharply over the past month, so too have bond yields in the Eurozone.
Industrial production is also on the slate for Friday — tipped to be quite an important measure in understanding where GDP losses have come from. Numbers had been improving at the start of the year as order books were backed up and there was increasing optimism among businesses.
Germany's industrial production will also be in focus, as Europe's largest economy it is a bellwether. The country's trade balance on Tuesday will also be one to watch.
US: Federal Reserve business and inflation risks
Inflation will also be in focus as the Federal Reserve gears up to meet on 17 March. The Fed has previously argued that there is significant wriggle room in the US economy to control inflation and remain resilient to pressures as it recovers.
Officials have previously indicated it could be some time before it stems the rate of quantitive easing asset purchases. Interest rates forecasts show they are unlikely to be hiked before 2024.
The outlook for vaccines in the US shows that there should be enough for all American adults by June, paving the way for the economy to reopen in the second quarter.
On inflation expectations, ING says the annual rate is "set to head to 1.6% from 1.4% while core (ex-food and energy) stays at 1.4%."
"Annual rates will start to rise quickly though in March-July as price pressures in a depressed, locked down economy 12 months ago are compared with price levels in a vibrant re-opening economy in 2021."
Other data from the US will include the University of Michigan Sentiment Index, which could get a lift from stimulus and vaccine news.
The Bank of Canada is also expected to announce it will leave monetary policy measures unchanged.
Key company results to watch:
Balfour Beatty (finals), Wednesday (BBY.L)
Foxtons (finals), Wednesday (FOXT.L)
Just Eat (finals), Wednesday (JET.L)
Morrisons (finals), Thursday (MRW.L)
Rolls-Royce (finals), Thursday (RR.L)