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Markets take a breath before the Fed’s January meeting minutes

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Wall Street stocks finished higher last week amid improved consumer sentiment, pushing aside prior concerns about a global economic slowdown.

The optimism about a grand bargain between the US and China and consistently low Treasury yields offset surprisingly weak economic data. However, the investors remain cautious against the extolling the consumer sentiment beat and what it may mean for markets.

This week, the Wall Street rally could stall if factory orders and used-home sales data confirm that US growth is slowing. The investors still perceive uncertainty on the bonds markets, and even a possible recession lurking. When you look deeper, the Treasury yields remain surprisingly low, reflecting fears about a weakening economy and lingering uncertainty. The 10-year Treasury yield, which moves opposite prices, has not even retested its Christmas Eve high of 2.82%, and on Friday languished around 2.66%.

The current week will be busy from economic, political and corporate data, which definitely dictate the market trends.

The continuing US-China trade talks will be on the spotlight. Both countries reported progress in trade negotiations last week, but President Donald Trump said Friday that the talks were “very complicated” and that he might extend the March 1 deadline and keep tariffs on Chinese goods from rising.

Meanwhile, the Fed is due to publish the minutes of its January meeting where its kept rates on hold and surprised markets by shifting to a more dovish stance on future rate hikes, citing subdued inflation and rising risks to global economic growth. This week will also see speeches from a number of Fed officials, including New York Fed President John Williams and St. Louis Fed head James Bullard.

Upcoming economic data

On Monday, February 18, the ECB Bank Supervisor Andrea Enria participates in the panel at the session “Banking Union – Challenges Ahead” at the 2019 European Parliamentary Week. The Belgian Central Bank Governor Pierre Wunsch to present the central bank’s annual report. Again in Europe, the UK is to publish industry data on house price inflation. The financial markets in the US will be closed for Washington’s Birthday, more widely known as President’s Day.

On Tuesday, February 19, the Reserve Bank of Australia is to publish the minutes of its latest policy-setting meeting. The UK will publish its monthly jobs report, while the ZEW Institute is to publish a report on German economic sentiment. The ECB Vice-President Luis de Guindos and the Chief Economist Peter Praet participates in panels of discussions on the economic outlook. Federal Reserve Bank of Cleveland President Loretta Mester will speak on the economic outlook and monetary policy before the 2019 Economic Forecast

On Wednesday, February 20, Australia will publish data on the wage price index. The ECB chief economist Peter Praet delivers Speech by at 11th Frankfurt Main Financial Centre Breakfast. The Fed is to publish the minutes of its January policy meeting.

On Thursday, February 21, Australia is to release its jobs report, while the Eurozone is to release data on private sector business activity. The European Central Bank is to publish its meeting minutes. German Economy Minister Altmaier and Russian Economy Minister Maxim Oreshkin will attend German commerce chambers’ Russia conference in Berlin, alongside senior lobbyists and industry executives. The US is to release data on durable goods orders, jobless claims, existing home sales and manufacturing activity in the Philadelphia area. The Federal Reserve Bank of Atlanta President Raphael Bostic to speak on the economic outlook and monetary policy before the Terry Third Thursday, in Atlanta. Meanwhile, the Bank of Canada Governor Stephen Poloz will deliver a speech at Chamber of Commerce of Metropolitan Montreal.

On Friday, February 22, the Ifo Institute is to publish a report on German business climate and the Eurozone is to release revised inflation data. Later, the ECB President Mario Draghi is to speak at an event in Bologna. Canada is scheduled to produce data on retail sales.

Upcoming corporate earnings

On Monday, February 18, Reckitt Benckiser, the British multinational consumer goods company, will publish its financial statement. During the day some manufacturing and industry companies will also release their reports, including Masonite International Corporation, Anglo American Platinum and Petra Diamonds.

On Tuesday, February 19, the markets will expect the earnings statement of the British financial institution HSBC Holdings, as well as the American petroleum and natural gas exploration and production company Noble Energy. Other companies posting their reports during the day will be Atlas Air Worldwide Holdings, AngloGold Ashanti Limited, InterContinental Hotels Group, and Pioneer Energy Services. The key event for the day will be the financial statement of retailer Walmart

On Wednesday, February 20, the markets will focus on the financial report of Air France-KLM. Later will be published the statement of the Anglo-Swiss multinational commodity trading and mining company Glencore Plc, as well as the shipowner Navios Maritime Holdings and KKR Real Estate Finance Trust.

On Thursday, February 21, Barclays PLC, British multinational investment bank, will publish its finance report. Later, will be published the statements of Domino’s Pizza and Teekay Corporation.