Apart from the vote on Chairman Bernanke’s re-appointment, the week will be dominated in the US by the first meeting of the year of the Fed’s Open Markets Committee.
After the worst week for markets in the US and around the world last week since last November, investors will be extra sensitive to the Fed meeting.
The Fed is not expected to change its current stance on interest rates which have been at their present 0%-0.25% level for eight months or more.
The Fed is also not expected to change its view that this level will be maintained "for an extended period of time".
The Fed will again point out that it anticipates that significant spare capacity, low inflation and stable inflationary expectations will justify keeping rates low for an extended period.
US money market rates have firmed in the past six weeks, but last week saw that process reversed and yields on 10 year bills fell late in the week after President Obama revealed his tough proposals to restructure American (and global) banking by forcing banks to choose between being deposit takers or traders.
The President is expected to push this controversial idea and one for a levy on bank assets and other measures in his State of The Union Speech this week in Washington.
On the data front, GDP data is expected to show 4.5% annualized growth in the December quarter.
The first estimate for that is out Friday night, our time.
Data for US house prices, home sales, consumer confidence and durable goods orders will also be released.
The US profit reporting season will also pick up pace.
Apple, Microsoft and Procter & Gamble Co are among dozens of companies due to post quarterly results this week in the US.
Reuters says US analysts are expecting 4th quarter company results to show a sharp improvement compared with 2008’s last quarter when the economic downturn hit profits hard.
S&P 500 earnings for the quarter are forecast to be up 193% versus a year ago, according to Thomson Reuters estimates. (That’s because of the widespread losses or very low profits a year ago.)
It would be the first quarter that the S&P 500 company earnings grew year over year since the second quarter of 2007.
Apple will also be watched to see what its much rumoured new tablet-sized device is like.
That is due for release on Wednesday the 27th.
Key Japanese inflation, spending and employment data will also be released and the Bank of Japan will leave rates at 0.1%..
Across the Tasman, the Reserve Bank of New Zealand is also expected to leave interest rates on hold.
In Europe quarterly earnings from Ericsson, Nokia and Siemens are due.
In Australia, December quarter inflation data will be watched closely in the run-up to the RBA’s Board meeting in early February.
We expect headline inflation to have risen 0.6%, taking it to 2.2% over the year to the December quarter.
The CPI is out Wednesday.
Underlying inflation is also likely to have increased by 0.6% in the quarter which will push the annual rate down to 3.3%.
The 4.3% fall in import prices in the December quarter suggests that the risk to our inflation forecast is on the downside.
Private sector credit data for December and for 2009 will also be released late in the week.
Producer Price Indexes are due for release later today.
Woolworths is due to release its second quarter and first half sales figures, an important milestone for the market and for the company.
Full year earnings are due from the Rio Tinto subsidiary, Coal and Allied. Rio’s uranium subsidiary, ERA produces its 2009 results as well.
And GUD Holdings produces interim figures, and perhaps more detail on whether it is still trying to takeover Breville.
That deal was halted by the competition regulator, the ACCC, late last year.
Investor, Milton Corp also reports interim earnings, as does its larger rival, Australian Foundation investment Co.
And, building products and services group, Alesco also reports its interim figures for the six months to the end of November.
It has already warned of lower earnings.
