Market Movers
Financial markets' turmoil continued to dominate price actions this week and investors are likely to look for policy responses to stabilise markets.
In the US , minutes from the FOMC January meeting are due for release on Wednesday, which might bring a bit more shades on the different views within the FOMC. In addition, several FOMC members are scheduled to speak in the coming week.
ECB President Draghi is set to speak to EU Parliament on Monday and his words will be scrutinised for any new comments on possible further easing. In addition, the minutes/accounts from the January ECB meeting are due for release on Thursday, which may provide indications of what instruments the ECB considers or prefers after the quite dovish January meeting.
In the UK , focus is on the EU council meeting on 18-19 February when the draft deal between the EU and the UK is to be discussed. If an agreement is reached at the meeting, the UK is likely to hold a EU in/out referendum in June. However, the negotiations are likely to be very difficult and it is not certain a deal will be made at this meeting.
Global Macro and Market Themes
The world is not yet facing a systemic crisis but risks are rising.
There is an element of central bank fatigue and global growth is set to be hit by the current turmoil.
We expect the ECB to launch a range of stimulus factors in March and the Fed to postpone rate hikes until September.
However, risky assets could remain under pressure until there is a coordinated global policy response.
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