Noreen Burkhart

Investing.com – Inflation worries will likely remain a major concern over the week ahead. Investors look forward to U.S. retail sales numbers and earnings results for major retailers such as Walmart (NYSE :). On Monday, China’s latest economic data will confirm that it is facing a slowdown in economic recovery. This comes as Europe continues to experience a surge in Covid-19-related infections. After the Bank of England surprised the markets earlier this month by not delivering the widely anticipated rate rise, it said that it needed more evidence of an improvement in UK labor market numbers. Here’s what you need to know to start your week.

1. U.S. retail sales

The highlight of the week’s economic calendar will be October retail sales data, due out on Tuesday, with economists expecting an increase of 1.1%, after a 0.7% rise in September.

Inflation in the United States has risen to its highest point in more than 30 years due to a worldwide supply chain crisis. Data on Friday revealed that consumers’ sentiment dropped to its lowest level for a decade as rising living standards and higher prices.

Investors think that the Federal Reserve might raise interest rates faster than it currently indicates to stem rising inflation.

Also included in the economic calendar are data on industrial production Tuesday and reports on building permits and housing starts Wednesday. The weekly figures for initial jobless claims Thursday also feature.

2. Earnings from retail

While the third quarter earnings season has slowed down, investors will still get an update on consumer spending with major retailers’ results this week. Home Depot (NYSE:), Walmart, Target (NYSE:), and Macy’s.

Before the holidays, investors will scrutinize earnings reports closely to see if retailers are providing guidance to help them determine if inflation is going to eat into their profits or not.

It has been a generally upbeat third quarter earnings season. Reuters reported that as of Friday, 459 of the companies in the have reported, with 80% of earnings results beating analysts’ forecasts.

3. China slows down

The recovery in the world’s number two economy is weakening and data on Monday, which includes reports on retail sales, fixed asset investment and industrial production is expected to confirm this. China’s loss of momentum, an important driver of global growth is clouding the uneven global recovery from the pandemic.

The recovery in China has been hit by an aggressive approach to containing Covid-19 outbreaks, a massive debt crisis in the country’s real estate sector and an energy crunch that has weighed on manufacturing activity.

Analysts think the country’s central bank is likely to take a cautious approach to loosening monetary policy to bolster the economy as slowing growth combined with soaring inflation fuel concerns over stagflation.

Meanwhile, U.S. President Joe Biden is to hold a virtual meeting with Chinese leader Xi Jinping on Monday, amid rising tensions between the world’s two largest economies. Officials from the United States have downplayed any hopes of trade negotiations.

4. UK jobs data

Since the BoE indicated it needs more information about the strength of UK’s labor market to hike rates first since the pandemic began, the BoE will examine the most recent jobs report Tuesday.

If there were any increases in unemployment following the expiration of a wage subvention scheme for pandemic-era workers at September’s end, then October employment data will reveal.

Inflation numbers will be released on Wednesday followed by retail sales figures Friday. The BoE could consider a rate increase at its December meeting. This is subject to any weakness in labor market data.

5. Europe suffers a pandemic-resurgence

Europe is seeing a resurgence of the Covid-19 pandemic, adding to headwinds for the region’s already fragile economic recovery.

According to data compiled from Reuters, Europe is responsible for over half the global average 7-day infection rate and half the latest deaths. These figures are the highest since April 2013, when the virus reached its peak in Italy.

Many countries such as the Czech Republic and Germany are planning new measures or imposing restrictions in order to limit the spread, which include Austria, Germany, Austria, Austria, and the Netherlands.

Holland was placed in a temporary lockdown of three weeks on Saturday. This is the first Western Europe-wide partial lockdown since this summer. Germany has reintroduced Covid-19 free tests Saturday, and Austria will be deciding on Sunday whether it wants to place a lockdown for people who aren’t vaccinated.

This report was contributed by Reuters