Welcome to the Investors Trading Academy economic
calendar of the week. Each week our news analysts review the upcoming economic events that you
should be monitoring. Equity investors will be watching currency markets this week for
signs that the recent, related trends of a weakening dollar and a strengthening stock
market will continue. After a historically bad start to the year, the Dow and S&P 500
both moved into positive territory last week, in part on expectations that a 3-week move
down by the dollar could buoy corporate profits and share prices.
Many investors had been concerned over the dollar’s strength, as it can crimp exports,
earnings and economic growth. Between Sept. 17 and mid-February, the dollar had risen
more than 2 percent against a basket of major currencies, as the US Federal Reserve embarked
on a tighter policy while other central banks were easing. The past week was dominated by
the US Federal Reserve meeting and resulting changes to forecasts. In the coming week,
the US will continue to hold centre stage with the release of a number of indicators
on the housing sector and revised estimates on US GDP. Investors will also focus on the
“flash” manufacturing PMI’s released across the globe – Japan, the US, France,
Germany and the Eurozone – on Thursday. With a short trading week ahead of the Easter
holiday, volume is expected to be light as markets move closer to the Good Friday holiday.
Economic data scheduled for release include February durable goods and several manufacturing
surveys. Investors will be looking for signs of improvement after regional manufacturing
surveys for New York and Philadelphia this week came in above expectations. While regional
Fed surveys on their own can be considered minor, when taken as a whole they give investors
a good idea of “whether we are off that bottom in terms of manufacturing.
Overall, the global environment looks much more supportive of growth, with central banks
communicating a dovish intent to investors. Key themes for the week will be the weaker
dollar, which has fallen following the recent Fed meeting, along with the ongoing, and seemingly
unstoppable, rise in crude oil that has confounded many.
Equity markets have remained firm despite the occasional dip; fund flows have yet to
turn bullish, which in one respect suggests a period of weakness ahead, but in another
indicates that there is still plenty of money on the sidelines that may enter and prompt
further gains for global stock markets.