Nikkei leads world higher in event-packed week ahead
LONDON/SYDNEY — Wall Street looked to open lower on Monday as investors braced for a week packed with central bank events and major data that could refine market wagers.
U.S. stock index futures tipped lower with S&P futures down by 0.1 per cent and Nasdaq futures trading largely flat worn out by record-closing highs in the prior session, as investors paused at the start of a week packed with key jobs data and Fed Chair Jerome Powell’s congressional testimony.
“We’re currently on a run that you may not see again in your lifetimes,” Jim Reid, strategist at Deutsche Bank, said in a note.
The S&P 500 last week completed a run of 16 positive weeks out of the last 18 for the first time since 1971, he noted. If the S&P finished this week also higher it would be the first time it had such a run since 1964.
Federal Reserve Chair Jerome Powell testifies before lawmakers on Wednesday and Thursday, though analysts assume he will stay in wait-and-see mode on policy given recent upside surprises on inflation that have helped temper market rate cut bets.
The February payrolls report on Friday could also shift the calculus with forecasts favouring a still-solid rise of 200,000 after January’s barnstorming 353,000 jump.
“We are still in an environment of economic improvement. Friday’s U.S. employment data will tell us a lot about where we are in terms of wage inflation and consumer resilience,” said Lilian Chovin, head of asset allocation at the British private bank, Coutts.
“It will also inform on whether the current narrative is sustainable.”
In Europe, a UK budget on Wednesday is followed by the European Central Bank’s policy meeting on Thursday. The ECB is considered certain to keep rates at 4.0 per cent, but also lower its outlook for inflation in a nod to eventual cuts.
Europe’s broadest stock index and the German DAX steadied while French stocks rose by 0.1 per cent and UK markets fell by 0.5 per cent.
Other events of note this week include U.S. President Joe Biden’s State of the Union address on Thursday, the Super Tuesday U.S. primaries and China’s National People’s Congress (NPC) meeting starting on Tuesday which might flag new stimulus measures.
The Bank of Canada also meets this week and the expectation is it will stay on hold, with a first cut seen in June or later.