This week, investors will focus more about the political and trade rhetoric, rather than the usual economic data. It is a week that comes a few days after the Fed raised interest rates for the first time this year and indicated that more hikes were on the way.
As you recall, the Fed was not the biggest mover of the financial markets last week. It was all about politics and trade talks after President Trump signed a new $60 billion tariff of select Chinese imports. On the other hand, China responded by applying tariffs of about $3 billion on American goods from the Trump country.
This is the new tariff coming after the president signed into law new tariffs on steel and aluminum that were targeted at China. Other countries like South Korea, Canada, and Mexico have received exceptions and the EU is negotiating on the same. The South Korean deal came after trade representatives of both countries met and made some concessions.
Over the weekend, Wall Street Journal reported that senior trade representatives from the United States and China were having secret negotiations which are aimed at reducing the American deficit. In his statement two weeks ago, Le Keqiang said that the country would move to reduce the barriers to entry for American firms and a commitment to end the stealing of intellectual property.
Another topic that will continue to dominate the news is about the adult film star, Stormy Daniels who had an interview with 60 Minutes on Sunday. In the interview, she claimed that she was threatened by Trump’s associates a few years ago. The implications on the market will be based on the response we receive from Trump and the decisions he will make under pressure.
From an economic data stand point, we will receive the Consumer Bureau Consumer Confidence numbers. Traders expect these numbers to show that the confidence among the consumers rose to 131.2 from last month’s 130.8.
On Wednesday, we will get the final reading of the Q4 GDP. Traders expect the data to show that the GDP for the quarter was at 2.7%, higher than last month’s number of 2.5%. The GDP Price Index is expected to remain at 2.3%. Investors will watch out for these numbers and compare them with the statement of the Federal Reserve last week about future rate hikes.
On Thursday, we will receive the Germany employment numbers. The unemployment rate is expected to drop from 5.4% to 5.5%. Investors expect that the country lost about 15K jobs, which is better than last month’s loss of 22K. We will also receive GDP data from the UK and Canada. Both are expected to remain unchanged at 0.4% and 1.4% respectively.
On Friday, many countries will be celebrating the Good Friday but on Saturday, we will receive manufacturing data from China.