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Week ahead: UK GDP, EU inflation, Biden's $3trn infrastructure plan

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Lucy Harley-McKeown
·4-min read
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STUCK SHIP EVER GIVEN, SUEZ CANAL -- MARCH 27, 2021:  Maxar's WorldView-3 collected new high-resolution satellite imagery of the Suez canal and the container ship (EVER GIVEN) that remains stuck in the canal north of the city of Suez, Egypt.  Please use: Satellite image (c) 2021 Maxar Technologies.
Maxar's WorldView-3 collected new high-resolution satellite imagery of the Suez canal and the container ship (EVER GIVEN) that remains stuck in the canal north of the city of Suez, Egypt. Photo: Satellite image (c) 2021 Maxar Technologies via Getty

It could be an incredibly busy week for markets, with big infrastructure plans in the offing in the US, an enormous container ship still wedged in the Suez Canal and the end of the quarter on the horizon.

Investors will watch how oil prices fare as global trade continues to get a battering as around 12% of the world's traded goods are stuck in a traffic jam.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is also meeting this week with the expectation that its members will want to keep a lid on oil production after another volatile week.

Coronavirus is still a market mover, with fresh lockdowns being imposed across European nations and the problematic issue of vaccine supply very much still on officials desks.

It is also a short week for many nations. Some respite will come for markets on Friday, when many economies around the world will pause for the long Easter weekend.

Weekend stories to watch for developments on during the week

Company results

  • Lululemon (LULU) — Q4

  • Next (NXT.L) — Full-year

  • 3i (III.L) — trading announcement

UK: More GDP readings, consumer credit and March PMIs

A laser beam touches the Gherkin from the Shard during the laser and searchlight show which marks the completion of the exterior of the Shard building in central London July 5, 2012. The 310-metre (1,016-feet) building, the tallest in western Europe, fired 12 lasers and 30 searchlights from the top of the Shard to 15 London skyscrapers including the Gherkin and the Canary Wharf. REUTERS/Olivia Harris (BRITAIN - Tags: SOCIETY BUSINESS CONSTRUCTION CITYSPACE)
On Tuesday, the Bank of England will give a read on consumer credit for February. This will give an idea of the health of the nation's finances in a particularly turbulent period for many. Photo: REUTERS/Olivia Harris

On Tuesday, the Bank of England will give a read on consumer credit for February. This will give an idea of the health of the nation's finances in a particularly turbulent period for many.

Wednesday will be another GDP reading for the UK for the fourth quarter which will be watched closely and could foster some volatility.

Tensions are still high between the UK and the rest of Europe as AstraZeneca (AZN.L) vaccine supply chains continue to be held hostage. Ursula von der Leyen said that AstraZeneca must honour EU commitments before they export further doses.

Nationwide's House Price Index is due on Monday and will give a read on how the housing market is faring following the extension to the stamp duty holiday.

Europe: Eurozone inflation, consumer sentiment

Flagge der Europäischen Union EU und Euro Geldscheine
Inflation has been a hot topic across the continent and a has been spectre since COVID-19 measures have been rolled out across the world. Photo: Getty

March figures will give a read on Eurozone inflation on Wednesday, which is set to rise. Analysts at ING think that food and energy prices will be the main drivers of that, although industrial goods could also be bumped more than expected too due to supply chain issues and input shortages.

Inflation has been a hot topic across the continent and a has been spectre since COVID-19 measures have been rolled out across the world.

Consumer confidence is also due on Tuesday which might carry through better sentiment due to potential vaccines in the pipeline in the coming months.

Europe is still grappling with a third wave of the coronavirus, as vaccine plans continue along a rocky road. New lockdowns have been forced in Italy, France and Poland, while Germany has extended its measures — stopping short of a complete shutdown over the five-day Easter break following protests.

Watch: What is inflation and why is it important?

US: Rocky road for Biden's stimulus package

U.S. President Joe Biden replaces his face mask after delivering remarks on the implementation of the American Rescue Plan in the State Dining Room at the White House in Washington, U.S., March 15, 2021. REUTERS/Kevin Lamarque     TPX IMAGES OF THE DAY
Investors will be watching indications that Biden's infrastructure plan will get through Congress. Photo: REUTERS/Kevin Lamarque

Following the breath of life of the $1.9tn (£1.3tn) stimulus package, Biden's government is turning its attention to a $3trn spending commitment to Build Back Better with green energy.

The infrastructure plan will get an outing on Wednesday and is centred on decarbonising US electricity production by 2050. The goal echoes other developed nations such as the UK.

There would be incentives for energy-efficient buildings and vehicles with additional rail and road investment on the slate. Biden is also looking to bolster broadband internet access and 5G.

These measures could be bound up in higher taxes for corporations and top earners as well as increased capital gains tax rates.

The main issue for the new president will getting this through Congress. 60 senators are needed to put it forward for a vote, meaning the potential package may need to be broken up into smaller packages to be more palatable to Republicans.

The US is also looking to the ISM index on Thursday, and jobs on Friday — both of which will be given a boost by the vaccine rollout and ongoing reopening measures.

Since FX markets are the only ones open on Friday, if jobs hit below expectations currency swaps could be extremely volatile.

Watch: 'My plan is to run for re-election' Biden

Elsewhere: Other figures to watch will be unemployment figures coming out of Japan on Monday, Australia's retail sales on Thursday and China PMIs on Wednesday.