The Federal Reserve and BoE are expected to raise interest rates and the second half of earnings season begins with 150 companies set to report this week.

The Bank of England and the Fed are expected by analysts to deliver another 75-basis point rate increase on Wednesday and Thursday, as the fight to tame inflation continues. However, as investors now are on the lookout for signs that aggressive monetary tightening may begin to slow down, the U.S. jobs report on Friday and Monday’s Eurozone inflation data will be In the spotlight.

With earnings season halfway through, this week will indicate whether equities can continue to take weak corporate results. Here is what is coming up this week:

1. Federal Reserve rate increase

Investors will be looking to the Chairman, Jerome Powell, for any hints on whether the rate hikes could slow due to softer economic data.

For the time being, markets are factoring in a smaller 50-basis-point rate increase for the Fed’s meeting in December and another 50bp for the first two meetings of next year.

2. Bank of England rate increase

BoE is also set to increase interest rates by 75bp on Thursday. It will make it the country’s eighth straight increase in a row as it fights inflation, currently in double digits as its above 10%. The U.K. is walking into a recession which could stem from bad to worse by spending cuts under new Prime Minister Rishi Sunak.

The estimates for a 1% rate hike were cut down last week after the new finance minister, Jeremy Hunt, reversed the majority of former PM Liz Truss’s planned tax cuts.

3. U.S, jobs data

Experts are estimating the Labour Department to announce that the U.S economy added 200,000 jobs last month, compared with 263,000 which were added in September.

A report on Friday revealed that U.S. labour costs have risen sharply in Q3, although private sector wage growth slowed significantly. Suggesting inflation had either peaked or was close to doing so.

4. Eurozone report

The Eurozone is set to release its flash inflation prediction for October today which is estimated to come in at a record high of 10.2%.

The energy crisis in Europe due to Russia’s war has worsened the economies and caused a slowdown in consumer spending. The Eurozone will also report preliminary GDP data for Q3 on Monday.

5. Earnings

More than 150 S&P 500 companies are set to report quarterly earnings this week. Starting today is Berkshire Hathaway, Stryker and Mondelez.   

(Sources: investing.com, reuters.com)