Listen to this article
Investors will be tuning in for remarks from a handful of Federal Reserve policymakers and US President Donald Trump’s first speech to Congress.
Here’s what to watch in the coming days.
US President Donald Trump will deliver his televised address to a joint session of Congress on Tuesday. Newly inaugurated presidents often deliver a speech instead of a formal State of the Union address. Investors will be hoping for more details on the policy front and updates on when these could be implemented — as Steven Mnuchin, the US Treasury secretary, has already indicated that Mr Trump’s administration would like to get tax reform pushed through by August, though he stopped short of outlining any additional details.
Mr Trump’s speech comes after legal battles over his travel ban, a shake-up of his national security team and concerns over contacts between representatives of Mr Trump’s campaign and Russia.
“We expect they (investors) will be only modestly disappointed by a general restatement of Trump’s priorities,” said analysts at TD Securities. “Comments suggesting close cooperation with vongressional Republicans would be positive for markets; emphasis on populist measures or a strident, antagonistic tone would be negative.”
Beige book and Fed speakers
On Thursday, the Federal Reserve will release its Beige Book, which provides anecdotal evidence on the state of the US economy from 12 regional branches of the Federal Reserve. The report is typically discussed at the Federal Open Market Committee’s policy meetings.
With Fed officials ready to raise interest rates “fairly soon”, and federal fund futures pointing to a 22.1 per cent chance of a rate rise next month, according to CME data, investors will parse through the report for updates on US economic expansion and labour market slack, along with signs of inflation.
Further clues on the timing of the Federal Reserve’s next interest-rate rise are likely to come from a handful of speeches by Federal Reserve policymakers. Dallas Fed president Robert Kaplan, a voting member of the FOMC, will kick things off on Monday, with other voting members including Dallas Fed president Robert Kaplan and vice-chair Stanley Fischer scheduled to speak during the week. Fed chair Janet Yellen will round out the week with remarks at the Executives Club of Chicago on Friday.
And it is just as busy on the data front, with updates on US economic growth, manufacturing and trade. Economists expect that capital goods orders excluding aircrafts, a core measure of US spending, cooled last month to 0.5 per cent, following a 0.7 per cent rise the previous month. However, headline durable goods are expected to have rebounded, climbing 1.9 per cent in January following a 0.5 per cent decline in December.
Meanwhile, a second reading of fourth-quarter growth is expected to show the US economy expanded 2.1 per cent, from an initial estimate of 1.9 per cent.