best Trading Outlook for February 28 - March 4, 2011

best Trading Outlook for February 28 - March 4, 2011 ; The week ahead might not be only about rising oil prices and risk aversion on the unrest in North Africa and the Middle East, as the market’s focus shifts to three interest rate announcements from the Reserve Bank of Australia, the Bank of Canada, and the European Central Bank, along with the U.S. Non-Farm Payrolls and Employment Situation report which could instill some optimism that job creation could be gaining momentum.

In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.

1. USD- U.S. Personal Income and Outlays, a measure of the income received and purchases made by consumers, released along with the Personal Consumption and Expenditures Price Index- a leading indicator of inflation preferred by the Federal Reserve, Mon., Feb. 28, 8:30 am, ET.

Consumer spending in the U.S. is forecast to register a smaller increase by 0.5% m/m in February from 0.7% m/m in January, while the Fed’s preferred inflation gauge, the core PCE Index, is expected to continue to show subdued inflationary pressures with a slight increase by 0.1% m/m, compared with the flat 0% reading in the previous month.

2. AUD- Reserve Bank of Australia Interest Rate Announcement, Mon., Feb. 28, 10:30 pm, ET.

As the Chinese government and PBOC step up their efforts to cool things off in the world’s second largest economy, which could reduce the demand from Australia’s number one trading partner, the Reserve Bank of Australia might not see any urgency to hike rates. The central bank is expected to keep the benchmark interest rate unchanged at 4.75% at this meeting. However, with inflationary pressures building up on rising commodity prices and wages, interest rate swaps data shows that the market is still pricing rates to increase by at least 31 basis points in 2011.

3. EUR- Euro-zone Flash HICP- Harmonized Index of Consumer Prices, the main measure of inflation, Tues., Mar. 1, 5:00 am, ET.

The preliminary flash estimate of the European Central Bank’s preferred inflation gauge is forecast to confirm the expectations that inflationary pressures in the Euro-zone would remain above the 2% comfort level, rising by 2.4% y/y in March, same as the 2.4% y/y increase in February.

4. CAD- Bank of Canada Interest Rate Announcement, Tues., Mar. 1, 9:00 am, ET.

Although the Bank of Canada is forecast to keep rates unchanged at 1.0% for another month, should the central bank revise higher its forecasts for inflation and economic growth, policy makers could consider resuming their campaign of interest rate hikes in the second quarter of 2011.

5. USD- U.S. ISM Manufacturing Index, a leading indicator of industrial activity, where a reading above or below 50 is the dividing line between economic expansion and contraction, Tues., Mar. 1, 10:00 am, ET.

The U.S. manufacturing sector is expected to register another month of expansion with an ISM index reading of 60.5 in February, a bit lower than 60.8 in December.

6. USD- U.S. ADP-Automatic Data Processing Employment Report,
a measure of jobs lost or added to the private sector of the economy, also serving as a preliminary estimate for the outcome of the monthly non-farm payrolls, Wed., Mar. 2, 8:15 am, ET. After adding 187K new jobs in January, the private sector payrolls are forecast to increase by up to 180K in February, remaining below the stronger December reading of 247K.

7. EUR- Euro-zone GDP- Gross Domestic Product,
the main measure of economic activity and growth, and Euro-zone Retail Sales, an important gauge of consumer spending measuring sales at retail establishments, Thurs., Mar. 3, 5:00 am, ET. The revised estimate of the Q4 GDP should confirm that the Euro-zone economy grew by 0.3% q/q in the fourth quarter, slower than the 0.4% q/q expansion in Q3 2010. Consumer spending in the Euro-zone is expected to recover from the 0.6% drop in December with retail sales rising by 0.3% m/m in January.

8. EUR- European Central Bank Interest Rate Announcement, Thurs., Mar. 3, 7:45 am, ET.

Three ECB Council members have already hinted that the central bank may need to consider changing its accommodative monetary policy in the near future. Although the European Central Bank is expected to keep the benchmark rate unchanged at 1.0%, the EUR could remain supported if inflationary pressures in the Euro-zone stay above the 2% target, forcing the ECB President and other policy makers to take a more hawkish stance and bring forward the core purpose of assuring price stability as the European Central Bank’s main objective.

9. USD- U.S. ISM Non-Manufacturing Index, a leading indicator of economic conditions in the services industries: agriculture, mining, construction, transportation, communications, wholesale trade and retail trade, Thurs., Mar. 3, 10:00 am, ET.

The ISM Non-Manufacturing Index is expected to show activity in the services industries registering another month of expansion with a reading of 59.7 in February, compared with 59.4 in January.

10. USD- U.S. Non-Farm Payrolls and Employment Situation Report, one of the most important indicators of economic health, measuring the number of new jobs created or lost in the world’s largest economy, Fri., Mar. 4, 8:30 am, ET.

Last month’s disappointingly low job creation could be followed by a much better U.S. Non-Farm Payrolls report with forecasts expecting the U.S. economy to add up to 170K jobs in February, compared with only 36K in the previous month. Private sector payrolls are also forecast to rise to 185K from 50K in January. On the other hand, the unemployment rate could inch higher to 9.1% in February from a previous reading of 9.0%. A positive jobs report, which could help alleviate the Fed’s concerns about the lack of “significant improvement in labor market conditions”, could lend support to the U.S. dollar. sourch seekingalpha.com... For the latest updates PRESS CTR + D or visit Stock Market news Today

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