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Week of 10 Feb Market Events: What to Expect

The week of 10 February will be another eventful one for the financial world and global economies. Key events to watch include inflation, earnings, and tariffs.

Let’s take a closer look at the week ahead:

A woman working on a laptop and taking notes

China’s Retaliatory Tariffs Come Into Effect

US-China tensions have been escalating, especially following the re-election of US President Donald Trump

Trump has made it a key priority to impose additional tariffs on China in an effort to slow its economic growth and challenge its rising global influence. For example, last Tuesday, Trump’s 10% tariff on Chinese goods went into effect. In response, China swiftly retaliated, announcing its tariffs on US products shortly afterwards. These included a 15% levy on imports of US coal and liquefied natural gas (LNG) and a 10% tariff on crude oil (CL) and agricultural equipment. The retaliatory tariffs are set to take effect today, Monday,10 February, intensifying the ongoing trade standoff between the two economic giants. 

Nonetheless, some note that it is important to remember that China has not gone full-scale with the tariffs. For context, China’s tariffs cover a total of $14 billion worth of US imports, compared to the $525 billion in Chinese goods affected by Trump’s tariffs, according to a Goldman Sachs estimate. (Source: Washington Post)

As such, while some have lost hope that the two countries will reach a deal, others believe that, given these factors, there is still a chance for these economic giants to find a middle ground. Still, only time will tell what will actually happen between these two countries and how these tariffs will affect the markets.

Key Data Coming from the US

January’s CPI

This week, on Wednesday, 12 February, the US Consumer Price Index (CPI) for January will be released. 

The report is anticipated to reveal persistent inflation, with both headline and core CPI potentially reaching 0.3%. This rate is predicted to be fueled by a rebound in goods prices and an upsurge in non-housing services. 

The CPI data will provide insight into the inflation trends within the world's largest economy and will likely be taken into account when the Federal Reserve decides on rates for the second time this year on 18-19 March.

Powell’s Testimony 

Fed Chair Jerome Powell is set to testify before Congress on Tuesday and Wednesday, and consumers, analysts, and traders alike may be looking for clues on the Federal Reserve's possible monetary policy track as we dive deeper into the new year.

More Releases

Besides the above, the following will be released from the US:

  • Tuesday, 11 February: Remarks from New York Fed President John Williams and Cleveland Fed President Beth Hammack.

  • Wednesday, 12 February: Monthly US federal budget and Atlanta Fed President Raphael Bostic remarks.

  • Thursday, 13 February: Producer Price Index (PPI) and initial jobless claims. 

  • Friday, 14 February: retail sales, import and export prices, and business inventories.

UK GDP Will Be Released

The UK’s Gross Domestic Product (GDP) will be released on Thursday, 13 February, reflecting the country’s economic growth or slowdown in Q4. 

It is no secret that the UK’s economy, like that of many other countries, has faced significant hurdles and challenges, which have stunted its growth over the past couple of years. The upcoming release, therefore, could provide a clearer picture of the UK’s economic landscape and its potential trajectory for this year.

For reference, if the release indicates further economic stagnation (as Q3’s GDP did), it could negatively impact the pound and vice versa.

Earnings Will Be Reported 

Earnings season will continue in full swing this week with the following reports taking centre stage:

Monday, 10 February

Tuesday, 11 February

Wednesday, 12 February

Thursday, 13 February

Friday, 14 February:

What will the data reveal about these companies and their sectors?

Conclusion

In conclusion, the week of 10 February is poised to be critical for global financial markets and economies. 

Key events include the intensifying US-China trade tensions, with China's retaliatory tariffs coming into effect, and the release of important economic data from the US and the UK. The US will see inflation data through the January CPI report and Fed Chair Jerome Powell's testimony, both of which will be pivotal for market sentiment. Meanwhile, the UK GDP release will provide further insight into the country's economic performance. Earnings reports from major companies across various sectors will also offer valuable signals for market trends. 

With so many factors at play, the outcomes of these events could shape economic expectations and trader behaviour in the days ahead.

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