Week ahead: Russia and Ukraine risks to the fore

The situation on the Russia-Ukraine border is set to remain at the forefront of market participants’ minds this week as the Olympics ends in China. Meanwhile core PCE inflation from the US – the Fed’s preferred gauge – is due at the end of the week.  

Russia and Ukraine 

Market participants will be keeping a keen eye on events on Ukraine’s easter border. Headline risks are set to persist, affecting energy markets but also having the potential to whipsaw stocks and bonds.  

US inflation 

No let-up in inflation pressures; that was the story last week as PPI hit 1% month-on-month. On Friday we get the core PCE reading – the Fed’s preferred gauge of inflation for consumers. The core personal consumption expenditures price index rose 4.9% from a year ago in December, the highest reading since 1983. The key thing for inflation watchers will be the month-on-month numbers, which could tell us whether inflation might be peaking. Meanwhile markets will also be parsing a series of flash PMI estimates for the Eurozone, UK and US economies. 

RBNZ 

The Reserve Bank of New Zealand (RBNZ) convenes this week with the markets betting on a hike, the first of perhaps seven 25bps hikes this year. In an MNI interview, Arthur Grimes, a former RBNZ Chairman and Chief Economist, called on the central bank to hike the benchmark rate by 75bps this week’s meeting. With markets already banking on hiking this year, the kiwi could struggle unless the RBNZ delivers this kind of hawkish surprise. 

Central bank speakers 

Eyes will be on the usual raft of Fedspeakers this week as markets try to figure out policymakers’ appetite for hiking by 50bps in March. Inter-meeting hike chatter has quietened down. Meanwhile we’ll be paying close attention to Bank of England governor Andrew Bailey, who’ll be speaking at the first annual BEAR (Bank of England Agenda for Research) conference. 

Earnings season continues 

Look for updates from Lucid, BeyondMeat, Moderna and Coinbase as earnings season on Wall Street winds up.  

Major economic data (times in GMT) 

Key earnings data