Asian and European shares are trading mostly lower on Monday and the U.S. dollar is recovering after falling to a five month low on Friday in a week that took its cues from a dovish U.S. Federal Reserve that signaled caution at the end of their 2 day meeting on Wednesday and cited global headwinds as a main reason for holding back from raising interest rates.
Despite core U.S. inflation ticking higher in January with the January PCE price index, excluding food and energy, increasing 1.7 percent year over year from a revised 1.46 percent in December, the highest level since February 2013, moving closer to the Fed’s 2 percent inflation target, and the labor market nearing full employment with a 4.9 percent unemployment rate in February and job gains averaging 228,000 per month over the past 3 months, the Federal Reserve is still only forecasting 2 interest rate hikes in 2016, down from 4 interest rates that were originally forecast during their December meeting.
That decision helped the dollar fall to a five month low on Friday alongside a downward revision in 2016 GDP from 2.4 percent to 2.2 percent.
On Friday the third estimate of 4th quarter 2015 GDP will be reported when the markets will be closed for Good Friday.
Economists from briefing.com forecast an increase of 1.0 percent, matching the 2nd estimate.
Some other data points this week include existing home for February that will be reported on Monday and new home sales for February on Wednesday.
Durable orders for February will be in focus on Thursday and the market expects a slide of -2.9 percent from +4.9 percent in January.
Monday- Existing Home Sales (FEB), Richmond Fed President Jeff Lacker, Atlanta Fed President Dennis Lockhart, and St. Louis President James Bullard will speak during the day.
Tuesday- FHFA Housing Price Index (JAN)
Wednesday- New Home Sales (FEB), Crude Inventories- weekly report, MBA Mortgage Index
Thursday- Durable Orders (FEB) Initial and Continuing Job Claims, Natural Gas Inventories
Friday- 4th Q 2015 GDP (3rd estimate)