(Reuters] – The Federal Reserve has been followed closely by the British, Australian, and euro zone central banks. They are all set to meet up next week.

It is expected that the Bank of England will raise rates again in less than two years. Investors will be able to see Friday’s U.S. employment data as they try to predict how aggressively the Fed will fight inflation.

Here’s your week-ahead in markets from Ira Iosebashvili @IraIosebashvili in New York, Kevin Buckland https://www.reuters.com/journalists/kevin-buckland in Tokyo, John O’Donnell https://www.reuters.com/journalists/john-odonnell in Frankfurt, Tommy Wilkes https://www.reuters.com/journalists/tommy-wilkes and Dhara Ranasinghe @DharaRanasinghe in London.

1. RUNNING HOT

The Federal Reserve is clearly out to tame inflation https://www.reuters.com/business/finance/inflation-fighting-fed-likely-flag-march-interest-rate-hike-2022-01-26 and reckons a “historically tight” labour market gives it plenty of room to raise rates without hurting jobs growth.

The January jobs data will confirm this view. Economists polled by Reuters forecast the U.S. economy created 238,000 new jobs versus 199,000 in December https://www.reuters.com/markets/us/us-job-growth-seen-accelerating-december-record-job-creation-anticipated-2021-2022-01-07, when employment rose less than expected due to worker shortages.

Proof of a tighter jobs market and wage gains may fuel further bets on how aggressive the Fed will be https://www.reuters.com/business/finance/nomura-forecasts-50-bp-fed-hike-march-2022-01-27 – markets now anticipate roughly five quarter-point rate hikes by year-end.

The earnings season is continuing with Google parent Alphabet Inc. (NASDAQ) Inc.’s reporting Feb. 1, and Amazon.com on Feb. 3, respectively. Earnings may be second to Wall Street’s rate-hikejitters, however. GRAPHIC: FED AND STOCKS, https://fingfx.thomsonreuters.com/gfx/mkt/gkplgjmlxvb/Pasted%20image%201643209205234.png

2/ TAKE A HIDE

At Thursday’s Bank of England meeting, expect interest rates to rise to 0.5% from 0.25% https://www.reuters.com/world/uk/bank-england-track-second-rate-rise-under-two-months-2022-01-24, to curb inflation running at its highest in almost 30 years.

After the BoE’s December tightening of policy, markets expect to see four additional 25 basis point rises before the end-2022. Investors are now seeking direction on the pace at which the bank plans to move.

The big question – one many central banks are grappling with – is whether a series of rate hikes now can curb inflation before price pressures trigger higher wage demands, and feed into generally higher price pressures https://www.reuters.com/world/uk/uk-manufacturers-plan-biggest-price-rises-since-1977-cbi-2022-01-25.

Watch out for comments from Governor Andrew Bailey about the strength of the labour market, wage growth, and his take on how fast inflationary pressures are building https://www.reuters.com/world/uk/boe-needs-lean-against-rising-price-pressures-mann-2022-01-21 beyond supply chain disruptions and spiking energy prices.

GRAPHIC: UK inflation, https://fingfx.thomsonreuters.com/gfx/mkt/zdvxoaooopx/uk%20inflation%20chart.PNG 3/ DIVIDED

Inflation is the topic that divides European Central Bank officers.

The Euro-area inflation rate is currently at an all time high of 5%. Wednesday’s January data could give the hawks more ammunition to push for a change in policy.

Comments from ECB President Christine Lagarde suggest inflation will drop back below https://www.reuters.com/world/europe/ecbs-lagarde-inflation-drivers-will-ease-gradually-2022-2022-01-20 its 2% target this year as pressures from high energy prices and supply bottlenecks ease.

Her opposition to market prices for rate hikes in 2019 may be a reason she might use. This goes against ECB messaging. The spillover from U.S. rate-hike bets is a potential headache https://www.reuters.com/business/nimble-fed-narrows-normalisation-window-timid-ecb-2022-01-27 for officials keen to avoid an unwanted tightening of monetary conditions.

So, Thursday’s meeting could prove lively even if no immediate action is expected – the ECB has already outlined plans https://www.reuters.com/markets/rates-bonds/ecb-set-dial-back-stimulus-one-more-notch-2021-12-15 to wrap up its PEPP stimulus scheme. GRAPHIC: When will euro zone inflation peak?, https://fingfx.thomsonreuters.com/gfx/mkt/myvmnjmkkpr/ECBFEB1.PNG

4/ DOVES, HIDE!

    As rate-hiking campaigns gather pace in other big economies, central bank doves are becoming an endangered species down under.

The Reserve Bank of Australia meets Tuesday against the backdrop of the hottest consumer inflation https://www.reuters.com/markets/rates-bonds/australian-inflation-surges-q4-market-bays-rate-hikes-2022-01-25 since 2014 and strongest labour market since 2008, piling pressure on RBA Governor Philip Lowe to take action.

Lowe has insisted a 2022 rate rise is unlikely, but economists are split https://www.reuters.com/markets/rates-bonds/australia-cbank-scrap-qe-feb-1-wait-with-rate-hikes-till-november-2022-01-26 on whether the RBA will capitulate. Traders have been betting that Lowe is behind inflation and they are pricing in a May rate increase, with at least three additional by the year’s end. GRAPHIC: Readying for Rates Liftoff, https://fingfx.thomsonreuters.com/gfx/mkt/jnvwelgqjvw/Pasted%20image%201643274394329.png

5/ UNUGLY DUCKLINGS SHINE

Europe’s banks have, for many years, been treated as the ugly ducklings within international finance. Their American competitors are much more profitable and valued.

Now they are trying to catch up https://www.reuters.com/markets/europe/now-or-never-european-banks-eye-comeback-against-wall-street-2022-01-27. More of these banks will present their case with 2021 results in the days ahead.

Europe’s governments have largely eliminated the long-feared wave in unpaid debt. They borrowed more money to rescue their economy, and indirectly, their banks.

With the possibility of steadily rising interest rates, almost all European banks will be able to keep up with scandal-stricken customers. Credit Suisse (SIX:), https://www.reuters.com/business/finance/credit-suisse-flags-500-mln-swiss-franc-legal-hit-q4-2022-01-25 are looking to put their best foot forward. GRAPHIC: Europe’s unloved banks are going cheap, https://graphics.reuters.com/GLOBAL-MARKETS/jnpwelglbpw/chart.png