STORY: From US and European inflation data to South Africa’s uncertain elections, here are the headlines to watch in business and finance next week.
:: Thinking ahead
:: US inflation data
Key U.S. inflation data due on Friday will likely give a hint as to how the Federal Reserve plans to cut interest rates.
The personal consumption expenditures price index follows separate data released earlier this month that showed monthly consumer price inflation was lower than expected.
That has raised investor expectations of a rate cut, but the Fed has indicated it will hold off on lowering rates for several months and wants to wait until inflation reaches its 2% target before taking action.
:: Eurozone inflation data
The European Central Bank has all but committed to cutting deposit rates from a record 4% in June.
But markets may continue to speculate as to how much and how quickly borrowing costs will be reduced thereafter…
…Especially if monthly inflation data due on Friday shows price pressures remain fragile.
Economists surveyed by Reuters expect euro zone inflation to rise to 2.5 percent year-on-year in May from 2.4 percent in April.
:: South African polls
South Africa’s ruling African National Congress party could lose its parliamentary majority for the first time since the end of apartheid in Wednesday’s vote, according to opinion polls.
The ANC may need coalition partners to govern.
If the ANC teams up with the business-friendly Democratic Alliance, the rand and other assets will take the consequences in the cold.
But drama could ensue if the party turns to the far-left Marxist Economic Freedom Fighters, led by former president Jacob Zuma.
