The coming week looks set to be fairly quiet with the International Monetary Fund’s spring meeting and minutes from the Federal Reserve and the European Central Bank’s latest meetings filling the gap before earnings season gets underway mid-month. Stock markets are likely to get a boost from Friday’s stronger than expected U.S. jobs report and investors will be watching to see whether Congress will pass President Joe Biden’s massive infrastructure plan announced last week. Monday’s ISM service sector data will also be in focus after a similar gauge of the manufacturing sector soared in March. Here is what you need to know to start your week.
- Stock market gains could continue
U.S. equity markets started April on a strong footing with the S&P 500 index scaling the 4,000 level for the first time last Thursday. Those gains could continue after the Labor Department reported Friday that the U.S. economy added 916,000 jobs in March, the most in seven months, while jobs growth in February was also larger than previously estimated.
Equity markets were closed for Good Friday in the U.S., Europe and elsewhere and will remain closed in some regions for Easter Monday.
The market rally has been driven by massive U.S. stimulus measures and expectations that the vaccine rollout will spur the economic recovery.
Investors will also be watching to see if Congress will pass the infrastructure plan President Biden introduced last week. It includes $2 trillion in spending but also contains plans to raise corporate taxes that investors fear could hit profits.
- IMF meeting
The IMF is to begin its spring meetings (virtually) on Monday where policymakers will give a snapshot of the economic fallout from the pandemic, but also release updated forecasts for growth for 2021 and 2022.
IMF Managing Director Kristalina Georgieva has already indicated that the updated World Economic Outlook will see an upward revision to January’s forecast for 5.5% global economic growth this year.
Aside from the updated economic outlook, G20 finance ministers will meet on Wednesday to discuss debt relief initiatives.
- Central bank minutes
The Federal Reserve is to publish the minutes of its March meeting on Wednesday and investors will be on the lookout for any fresh insights on inflation amid concerns that unprecedented stimulus will lead to rising price pressures.
Fed Chairman Jerome Powell played down concerns about inflation after the bank’s March meeting, saying policymakers see inflationary pressures as transient.
The ECB is to release its latest meeting minutes on Thursday. Last week ECB President Christine Lagarde said investors could test the bank’s willingness to rein in rising borrowing costs “as much as they want”.
- Powell, Fed speakers
Investors will be watching an appearance by Fed Chair Jerome Powell who is due to discuss the global economy on an IMF panel Thursday.
Other Fed policymakers making appearances during the week include Richmond Fed President Tom Barkin on Wednesday and Chicago Fed President Charles Evans, who is to deliver remarks on Tuesday and Wednesday.
Meanwhile, U.S. Treasury Secretary Janet Yellen is to speak at a webinar hosted by the Chicago Council on Global Affairs on Monday to discuss the global economic recovery from the pandemic.
- Economic data
The Institute of Supply Management is to release what will be closely watched data on service sector activity on Monday. An ISM survey of the manufacturing sector released late last week showed that activity surged to its highest in 37 years in March, a strong indication that an economic rebound is probably underway.
The economic calendar also features Thursday’s weekly data on initial jobless claims along with figures on producer price inflation on Friday, which will be scrutinized for signs of developing inflationary pressures.