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Inflation Data, Earnings & More: What to Expect on the Week of Feb. 26

Plus500 | Monday 26 February 2024

The week of February 26 brings a series of important economic news and events spanning from the Federal Reserve’s preferred inflation gauge to corporate earnings releases, and inflation data from the Eurozone and Japan. Here’s what you can expect this week:

inflation illustration of economic charts

CPI: Will Japan Recoup Its Strength?

Japan Consumer Price Index (CPI) data is scheduled to be released on late Monday, February 26 (UK time). 

Following a less-than-stellar report on February 15, whereby Japan slid into a recession and lost its status to Germany as the world’s third-largest economy, traders and consumers alike may want to keep an eye out for the upcoming inflation data to get more valuable insights into the state of the Japanese economy and its possible trajectory.

Additionally, the report will take place ahead of the Bank of Japan (BoJ) meeting which is due to take place on March 18-19, and the upcoming release could potentially change the central bank’s monetary policy trajectory. (Source: BoJ)

While December's headline inflation in Japan reached 2.6%, the upcoming CPI report is expected to indicate a decrease to 1.9% in January. This depreciation is also anticipated in the super core rate, projected to drop from the previous 3.7% to 3.3%.

Interestingly, despite Japan’s recent economic woes, its economy may have garnered the attention of many investors including business mogul Warren Buffett, who recently spoke favorably about Japanese stocks and led the Nikkei 225 (Japan 225) index to soar.

PCE: What Will the Fed’s Preferred Inflation Measure Reveal?

The upcoming US Personal Consumption Expenditure (PCE) data which is set to be released on Thursday, February 29 is arguably among one of this week’s most important reports. 

PCE, which reveals consumer spending habits and is highly regarded by the Federal Reserve, is expected to show a rise to 0.3% in January compared to December’s 0.2%. While the actual results of the release are yet to be known, in general, a rise in PCE can indicate higher inflation. 

That said, if these predictions materialize, then it could postpone the expected Fed interest rate cuts this year as the US central bank will have to take additional measures to tackle inflation.

Inflation Data: How Is the Eurozone Faring?

Eurozone inflation is set to be released on Friday, March 1, just 6 days ahead of the European Central Bank (ECB) meeting on March 7. 

The data is expected to show that inflation may be nearing the ECB’s 2% target as February’s annual reading is projected to come in at 2.5% which is below January’s 2.8% and December’s 2.9%. 

Despite these positive projections, many, including Bundesbank’s President, Joachim Nagel, believe that the ECB should avoid cutting rates soon and should take into consideration upcoming data such as the wage figures in Q2 2024. 

Corporate Earnings on the Horizon 

Following a week of earnings highlights from companies like NVIDIA (NVDA) and Walmart (WMT), this week is filled with earnings releases with the retail sector standing out prominently. Many retail giants like Lowe’s (LOW), TJX (TJX), Best Buy (BBY), and Marcy’s (M) are set to report their results which can provide valuable information about consumer spending amidst the tumultuous economic climate of the past year as inflation, recession fears, and hawkish rates took a toll on the global economies. 

It will be interesting to see what the upcoming releases will reveal about consumer spending and the retail sector and how it might affect the Fed’s upcoming monetary policy meeting.

Conclusion

This week promises to be eventful with a plethora of financial events from retail earnings to inflation data set to take place. Traders, investors, and consumers may want to keep tabs on the results to see what they might reveal about the economy and the markets as we head into a new month soon.


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