GLOBE'S VIEW https://www.theglobeandmail.com/globe-investor/inside-the-market/market-updates/global-shares-make-guarded-gains-plenty-of-risk-ahead/article16772779/
ALL JUST SCHMOKE'NMIRRORS
Printing presses workin overtime
Spot gold was also firm at $1,271.70 an ounce, but faces stiff resistance from $1,273 to $1,278.
Japan’s Nikkei led the way in Asian trading, with a rise of 1.3 per cent to 14,668, and away from last week’s trough at 13,995. Shanghai also added 1.7 per cent after its recent sell-off.
But emerging market tensions were back in focus after credit rating downgrades late on Friday for Turkey and Ukraine, two of the countries most under fire in markets.
Turkey’s lira and its main stock market suffered their biggest falls in a week although losses in Ukrainian assets were limited by its imposition from Friday of capital controls.
Expectations that cuts in U.S. monetary stimulus, which has buoyed risk assets for several years, are one of the main reasons for the pressure being seen in emerging markets.
Fed chair Yellen will be able to offer her own reading of the jobs report before lawmakers this week, which could give markets a fresh steer on the pace of stimulus withdrawal.
Analysts generally assume she will stick to the script of recent policy meetings, reiterating that a gradual decline in asset buying is likely as long as the economy continues to improve as assumed.
“We expect her to state that tapering is not on a pre-set course and the committee will adjust course as needed, particularly if the expected firming in growth and gains in payrolls do not persist,” Barclays analysts said in a note.
Yellen is also likely to repeat the standard forward guidance that the funds rate will remain near zero until the unemployment rate falls well below 6.5 per cent, as long as inflation is subdued.
Major U.S. data includes retail sales on Thursday, for which a flat result is forecast due partly to bad weather and a rise in gasoline prices.
China releases trade numbers on Wednesday and consumer prices on Friday. Analysts at Commonwealth Bank of Australia predict exports will have shrunk in January but mainly because of significant base effects as January last year saw an outsized 25 per cent increase.
Trade flows can be very volatile in January and February because of the timing of the Lunar New Year holiday.
The euro zone releases its first estimate of economic growth on Friday and forecasts favor a slim 0.2 per cent increase in the fourth quarter, which would keep pressure on for more action from the European Central Bank.
ECB President Mario Draghi gives a speech on “Progress Through Crisis?” on Wednesday and markets will be sensitive to any hint of further accommodation to come.
The Bank of England issues its February Inflation Report on Wednesday, which is likely show price pressures are muted and so support the outlook for low rates.
BoE chief Mark Carney is expected to sketch out a new format for forward guidance after a quicker-than-expected fall in unemployment undermined an original plan, outlined in August.