In the coming trading week, investors will be given various macroeconomic data to process. The focus is, among other things, on the monthly jobs report of the US government. Growth figures from, among others, the United Kingdom will also follow.
The US jobs report plays an important role in the interest rate policy of the Federal Reserve. A strong labor market gives the Fed more room to continue raising rates. The report will be published Friday.
Japan, UK, France
On the macroeconomic front, investors will also be faced with data on economic growth in Japan and the United Kingdom next week, and the trade balance in France. Industrial orders and government debt in the US are also on the agenda.
In Europe, fears of interest rate hikes have hung like a dark cloud over the trading floors for some time. Christine Lagarde, president of the European Central Bank (ECB), said again on Sunday that interest rates will be raised by another 50 basis points later this month to curb inflation. She pointed, among other things, to so-called core inflation in the eurozone, which rose to a new record in February.
Let go
Former top official of the ECB, Otmar Issing, fears that inflation in Europe will rise further in the coming period. The ‘inflation shocks’ will be caused by wage increases, he warned on Sunday. Acting early is the best approach. The ECB has missed that quite a bit,” said the economist.
Mary Daly, president of the Federal Reserve in San Francisco, also warns that more is needed to bring down the sky-high inflation. According to her, the US central bank can raise interest rates further and keep them at the same level for longer than expected.
AEX
Higher interest rates are bad news for equities and especially unfavorable for fast-growing tech and chip companies. Nevertheless, the stock exchange in Amsterdam did rise last week. The AEX index, which was exactly 40 years old on Saturday, ended with a weekly profit of almost 2 percent.
The mood on the stock markets may be dampened next week by China’s modest economic growth target. Beijing is aiming for a growth of 5 percent in 2023. That is one of the lowest growth targets in decades. For last year, the country had predicted a growth of 5.5 percent, but the economy only grew 3 percent due to ongoing corona problems. The growth target is below many economists’ expectations.
