Noreen Burkhart

Investing.com — Equity markets were roiled last week after the Federal Reserve delivered a widely expected half percentage point and flagged similar moves at upcoming meetings as it battles to curb soaring inflation, and more volatility could be in store if Wednesday’s inflation data comes in hotter than expected. Investors will be paying attention to speeches by several Fed officials throughout the week. China will soon release closely-watched data about trade and inflation. However, GDP data from the UK could indicate slowing growth. The EU’s impending embargo on Russian oil will continue to focus attention on energy prices. Here’s what you need to know to start your week.

1. U.S. inflation data

Wednesday’s CPI data for April will show whether the fastest surge in inflation in over 40 years has peaked. As record-breaking gasoline prices hit their highest level, the March annual rate of inflation was 8.5%.

While economists forecast an annual rate of, stronger than anticipated readings could highlight the necessity for Fed tightening monetary policy.

The Fed’s aggressive tightening is feared by investors as it could cause a severe recession.

In the next week there will be many speeches from Fed policymakers, including Atlanta Fed president Raphael, New York Fed president John, Fed governor Christopher, Minneapolis Fed president Neel, San Francisco Fed presidency Mary, and Loretta, Fed president of Cleveland.

2. Elevated volatility

It was their fifth consecutive week of losses last week and it was its sixth. It was the longest losing streak for the S&P 500 since mid-2011 and for the Nasdaq since late 2012.

Keith Lerner, Chief Market Strategist and Co-Chief Investment Officer at Truist Advisory Services said that the market is preoccupied with the Fed being behind curve.

Markets have priced in a roughly 75% of a 75 basis-point rate hike at the Fed’s June meeting, despite Fed Chair Jerome Powell ruling that out last Wednesday.

The combination of an increasingly hawkish Fed and a rise in bond yields along with geopolitical risks like the war in Ukraine will continue to increase market volatility.

3. China Data

China is to release data on trade and inflation on Monday which will show the impact of Covid-19 lockdowns on the world’s second largest economy.

Economists expect trade data to reveal that global growth fell to its lowest point since mid-2020 in March, and then contract for the second month because of tightening in Shanghai and other places on domestic demand.

Expected data will show that prices have risen due to shortages, with factory gate inflation expected to continue at high levels.

Shanghai faces challenges in getting its factories up and running, which are key linkages to global supply chains. However, Shanghai’s 25 million inhabitants remain locked down.

4. Eurozone, U.K. data

The U.K.’s preliminary data for the first quarter of the year will show the difficulties central banks face in trying to counter soaring prices and heightened concern over growth.

According to economists, the index will drop again in April after falling from the low point reached in 2020 when the pandemic began.

U.K.: The economy should have grown by 1% during the first quarter. March, however, is predicted to show a flat monthly reading.

Last week, the Bank of England warned Britain that there is a danger of both a recession as well as inflation higher than 10%. The Bank of England raised its target to 1% from 2009.

The next week will see several European Central Bank officers speak, including President Christine.

5. Energy prices

The European Union is on the verge of agreeing to a new set of sanctions against Moscow, for its invading Ukraine. These include a phased ban on Russian oil imports, making up more than 25% of EU imports.

This move will force European refineries to race for new crude suppliers, and it will leave drivers paying higher fuel costs at a time of global cost-of-living crisis.

Prices rose by 5% last week due to the looming ban, but rose nearly 4% because of the possibility that there would be a tighter supply. This offsets concerns about the future outlook for global economic growth.

Phil Flynn from Price Futures Group, an analyst, said that the fundamentals of oil were bullish in the short term and that it was only fear of an economic slowdown for the future holding us back.

–This report was contributed by Reuters