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Global Economy Week Ahead: European Wages, U.K. Inflation, U.S. Home Sales

19 Mar 2017 7:00 pm
By WSJ Staff 

The week ahead will bring data from advanced economies around the globe, from European wages and British inflation to Japan's trade surplus and the U.S. housing market.

MONDAY: The European Central Bank is looking for signs that the recent energy-driven pickup in inflation will turn into something more durable, and has made clear that acceleration in wages will be needed for that to happen. The European Union's statistics agency on Monday releases wage growth figures for the fourth quarter of 2016, but they are expected to show only a modest pickup from the three months to September despite a continuing drop in unemployment.

More than a half-dozen Federal Reserve officials will speak this week, on the heels of the U.S. central bank's decision to raise short-term interest rates for the third time since the financial crisis. First up, on Monday, is Chicago Fed President Charles Evans, who has called for a "slow pace of normalization" and who voted in favor of last week's rate increase.

TUESDAY: The Office for National Statistics will release February consumer-price index data. U.K. consumer prices were up 1.8% in January from a year earlier, closing in on the Bank of England's 2% inflation goal as they were boosted by the pound's fall since last summer's Brexit vote. The BOE held its benchmark rate steady last week, but minutes of the meeting said some officials thought "it would take relatively little further upside news on the prospects for activity or inflation for them to consider that a more immediate reduction in policy support might be warranted."

WEDNESDAY: Japan's Finance Ministry will release February trade data (release time is Tuesday evening in the U.S.). Economists expect a trade surplus of 881.4 billion yen ($7.78 billion), much larger than the surplus of Yen239.9 billion reported in the same month a year earlier. Economists will be looking for signs of a sustained turnaround in exports after softness last year, helped by a rebound in demand for Japanese goods in the U.S. and Asia.

Mortgage rates in the U.S. have risen in recent months. The National Association of Realtors's monthly report on existing-home sales could show if higher borrowing costs damped buyer demand in February. That hasn't happened yet: January's sales pace was the strongest since February 2007. Data on the smaller market for newly built homes will come Thursday from the Commerce Department.

FRIDAY: IHS Markit's survey of purchasing managers has pointed to a pickup in eurozone economic growth during the first two months of the year, and the March reading is expected to confirm acceleration in the first quarter. Although the composite PMI is expected to fall to 55.8 from 56.0 in February, that would leave it well above the 50 mark that divides growth from contraction, and above levels common during the recovery to date.

(END) Dow Jones Newswires

March 19, 2017 15:00 ET (19:00 GMT)

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