The important economic news that will drive the markets this week

Global financial markets will focus on this week's European Central Bank meeting for further details on when the central bank plans to end its massive economic stimulus program.

Staying on the central bank front, traders will pay close attention to a monetary policy decision from the Bank of Japan for hints on when it will start withdrawing stimulus.

Meanwhile, investors will keep an eye on the monthly U.S. employment report to gauge how it will impact the Federal Reserve's view on monetary policy in the months ahead.

Elsewhere, in the UK, investors will focus on a report on activity in the dominant services sector for further indications on the health of the economy and the likelihood of the Bank of England raising interest rates this year.

Market participants will also be looking ahead to monthly trade figures out of China amid recent signs that momentum in the world's second largest economy remains strong.

UK Services PMI - Monday, 15:30
A survey on Britain's giant services sector due at 0930GMT (4:30AM ET) on Monday is forecast to inch up to 53.3 from the previous month's reading of 53.0. While Britain's economy is lagging behind the global recovery, it has held up better than the gloomy forecasts made at the time of the 2016 vote to leave the European Union. The Bank of England kept interest rates steady last month, but signaled it was likely to raise rates sooner and by more than it thought a few months ago as it seeks to keep a grip on inflation.

China Trade Figures - Thursday, Tentative
China is to release February trade figures at around 0300GMT on Thursday. Exports are forecast to have climbed 13.9% from a year earlier, following a gain of 11.1% in the preceding month, while imports are expected to rise 9.7%, after soaring 36.9% in January. Additionally, on Friday, the Asian nation will publish data on February consumer and producer price inflation. The reports are expected to show that consumer prices rose 2.4% last month, while producer prices are forecast to increase by 3.8%. China's economy grew 6.8% in the fourth-quarter from a year earlier, helped by a rebound in the industrial sector, a resilient property market and strong export growth.

ECB's Policy Meeting - Thursday, 14:45
The European Central Bank is widely expected to keep interest rates at their current record low levels and make no changes to its guidance on future policy when it holds its second meeting of the year at 1245GMT (7:45AM ET) on Thursday. President Mario Draghi will hold what will be a closely-watched press conference 45 minutes after the rate announcement. How he views signs of undershooting inflation and any clues on when the central bank plans to end its €2.5 trillion stimulus program will be important. Concerned about recent market turbulence, the strong euro and a dip in both headline and underlying inflation, officials prefer waiting, perhaps as late as the summer, before starting to signal the end of asset buys, three sources with direct knowledge of the discussion said last week.

BoJ Policy Announcement - Friday, Tentative
The Bank of Japan is also seen keeping policy on hold at the conclusion of its two-day rate review on Friday, including a pledge to keep short-term interest rates at minus 0.1%, while painting a slightly better picture of the economy. BoJ Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision. His comments will be monitored closely for any new insight on his views on inflation and how that can affect its current stimulus policies. Investors will also be watching for comments on the yen, in light of its recent surge against the dollar. There have been some indications recently that the central bank is setting the ground to begin discussions on winding back its quantitative easing program thanks to an improving economic outlook and hints of rising inflation.

U.S. Employment Report - Friday, 15:30
The U.S. Labor Department will release the nonfarm payrolls report for February at 8:30AM ET (1330GMT) on Friday, and it will be watched more for what it says about wages than hiring. The consensus forecast is that the data will show jobs growth of 204,000, after adding 200,000 positions in January, while the unemployment rate is forecast to dip to a 17-year low of 4.0% from 4.1%. Most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.3%, following a similar gain a month earlier. On an annualized basis, wages are forecast to increase 2.9%, slowing slightly from 2.9% in January, which was the largest annual gain in more than 8-1/2 years. A pickup in wages could be an early sign for higher inflation, supporting the case for higher interest rates in the months ahead.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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