Noreen Burke

Investing.com – Investors are likely to be worried about rising tensions in Moscow over Ukraine, and speculation about the future direction of monetary policy. The release of an important U.S. inflation measure and a series of earnings results by major U.S. retailers will raise concerns about rising inflation. The oil price will continue to be the focus while data on PMI from the U.K., Eurozone and other countries may provide insight into the economic impacts of Covid-19. This is what you should know in order to get started on your week.

1. Market Turbulence

Although the U.S. markets will close Monday due to Presidents’ Day, investors could still face another difficult week because of fears regarding Ukraine. This is driving demand for assets that are safe and secure.

Ongoing uncertainty over the Federal Reserve’s next policy move is also likely to continue to weigh on equities.

The Fed has signaled that it will hike interest rates at its upcoming meeting in March to bring down inflation, which has surged past the central bank’s 2% target to hit its highest levels in four decades, but it has not indicated how aggressively it will act.

James Bullard of St. Louis Fed has called for action to combat inflation. John Williams, chief at New York Fed, said that Friday’s statement was a call for central banks to take big steps in the wake of their rate-hike cycles.

“This is a confused market, confused about Ukraine, confused about how aggressive the Fed is going to be, and pretty much ignoring very strong earnings results from the fourth quarter,” Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York told Reuters.

2. Data from the United States

Amid speculation over the prospect of a half percentage point rate increase from the Fed in March Friday’s data on the personal consumption expenditures price index will be closely watched.

Rumoredly, the Fed’s most favorite measure of inflation, the PCE Price Index, will rise year-over–year in January. While the core reading (which excludes fuel prices) is expected to rise.

As part of the report, and contains data on PCE. Additional economic data for Friday include revised numbers on and for January, as well as a report for on for January.

A number of Fed officials will give speeches during the week including Richmond Fed President Tom and San Francisco Fed President Mary. Loretta Fed President Loretta as well as Christopher Fed Governor.

3. Earnings from retail

Following a strong rebound, consumers have regained their focus. Major retailers will release earnings results for this week. This week’s data will show how inflation has impacted spending. The rebound in retail sales has not led to consumer confidence dropping to a decade-low in recent months, raising fears about an economic slowdown.

Home Depot (NYSE :), Lowe’s NYSE :), Macy’s NYSE : Foot locker (NYSE:), among others, will be reporting fourth quarter results over the course of this week. Anheuser Busch Inbev, NYSE: is another company that will report earnings. Alibaba (NYSE:), Caesars Entertainment (NASDAQ:), Krispy Kreme (NASDAQ:), and Beyond Meat. (NASDAQ:).

Apart from bottom-line numbers, investors will want to look at how companies handle the supply chain crisis and their view on inflation.

4. Oil prices

The possibility that oil prices will remain volatile this week could lead to a shift in the market as traders consider the impact of the Russia-Ukraine conflict on the price of oil and the likelihood of higher Iranian oil exports.

The fear of possible disruption in supplies from Russia’s top exporter sanctions if Ukraine attacks Russia has supported prices. These have been supported also by the recovery in consumer demand following the pandemic.

Prices are currently hovering at $91/barrel and have reached their highest level since 2014. The global benchmark price, meanwhile, is close to seven year highs.

A rising inflation rate is a result of higher oil prices. This raises concerns about the Fed’s need for tightening monetary policy in order to control consumer prices.

Investors will also have the chance to measure the effect of higher oil prices on energy companies’ earnings this week when Occidental Petroleum (NYSE:), EOG Resources (NYSE:), NRG Energy (NYSE:), Chesapeake Energy (NYSE:) and Coterra Energy (NYSE:) all report.

5. PMI Data

PMI data will be available for the U.K. on Monday. The Eurozone may release February PMI data. These numbers could indicate a rise in economic activity, as countries remove additional pandemic-era restrictions. Germany’s on Tuesday will also be closely watched.

An economic recovery that shows positive signs could prompt central banks to fast unwind the post-pandemic stimulus.

While the Bank of England looks set to increase rates in March, European Central Bank policymakers remain debating whether they will have to hike rates this year to curb inflation.

The Governor of the BoE and other policymakers will appear before Parliament’s Treasury Committee Wednesday, to answer questions about inflation and the outlook for the economy.

Several ECB representatives will also be present during this week’s events, including Isabel and Vice President Luis.

This was made possible by Reuters