Fading hopes for a third round of quantitative easing from the US Federal Reserve may have been partly responsible for the recent decline in equity markets. The Fed’s Open Market Committee meeting on Tuesday, therefore, is likely to come as a disappointment to equity bulls, analysts believe.

Reduced from two days to one, the rate-setting decision is announced on Tuesday and there will be no press conference to follow the meeting. Given this brevity, it is highly unlikely that Ben Bernanke, the chairman, will announce any significant new policy.

“We do not expect any major changes to the upcoming FOMC statement and think it unlikely QE3 is mentioned in any form,” say analysts at RBC Capital Markets.

Norway’s central bank is seen as more likely to alter its policy following recent comments from Norges Bank officials regarding the strength of the krone.

The central bank last cut its main rate at the December meeting, by 50 basis points to 1.75 per cent, and Oystein Olsen, the governor, has since hinted that if the krone continues to strengthen, interest rate policy may be used to weaken it.

“The Norges Bank remains sensitive to krone appreciation, which would affect exports, employment and inflation in the economy,” says Madhur Jha at HSBC. “The decision at this meeting is a close call but, on balance, we expect another rate cut of 25bp.”

Eurozone finance ministers meet on Monday and Tuesday and Greece is likely to form a large part of the agenda as settlement of transactions for the debt swap takes place on Monday.

Meanwhile on the data front, it is a predominantly industrial week. Machine orders and corporate goods prices from Japan kick off the week on Monday. On Wednesday, Japan’s industrial production is expected to have improved in January after the previous month’s 1.2 per cent fall.

Also on Wednesday, industrial production data for January are published in the eurozone. The slowdown in manufacturing PMI has eased recently and industrial production is also seen improving slightly, climbing 0.5 per cent month on month after December’s 1.1 per cent fall.

In the US on Thursday, the two closely watched regional surveys of industrial activity from the New York and the Philadelphia Federal Reserve banks are published. The Empire State survey, after a recently improving trend, is forecast to ease back slightly in March, while the Philly Fed is expected to show continued improvement.

These two surveys precede Friday’s industrial production figure, which is seen rising 0.4 per cent month on month in February after January’s flat reading.

On Tuesday, the US also reports retail sales for February, which are expected to reflect a boost in car sales and higher petrol prices. Total sales are expected to rise 1 per cent after January’s 0.4 per cent increase. Excluding car sales, a more modest 0.7 per cent rise is forecast.

In the UK, the latest unemployment statistics on Wednesday are expected to show that the jobless rate remained at 8.4 per cent in January. The annualised rise in average earnings is not expected to give the Bank of England any inflationary worries, falling to 1.8 per cent from 2 per cent in December.

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