The US Federal Reserve and the Bank of England both meet next week, with neither expected to shift interest rates but their comments likely to shift the market's expectations.
February starting on Thursday means the sluice gate will open on the new deluge of macroeconomic data, starting with purchasing managers index on the 1st and then Friday 2nd seeing the big news of the US non-farm payrolls report.
More reserve from the Fed?
Fed chief Jerome Powell and co will announce their decision on Wednesday, where they are predicted to leave rates unchanged and even push back against forecasts of a March cut.
At last month's Federal Open Market Committee meeting there was a dovish shift as policymakers acknowledged that economic growth has slowed and inflation eased over the past year, which was interpreted by markets a signal that rate cuts were coming soon.
At one point, the market was predicting seven cuts of 25 basis points this year, with the first coming in March – but now just a 50% chance of a March move is being priced-in.
This looks "too soon", says James Knightley at ING, given strong growth and a tight jobs market, with UBS currency strategists saying they see "room for the Fed to further push back against rate cut expectations".
Hawkish BoE
On Thursday, the Bank of England's monetary policy committee is expected to keep interest rates unchanged for a fourth consecutive meeting at 5.25%.
The BoE has been among the more hawkish of the big central banks in the past few months, which has supported the pound.
"We expect them to stick to their hawkish message and not signal any rate cuts in the near future," said the UBS strategists.
Barclays is different, expecting the MPC to send a big signal that it could be ready to talk about cuts soon, suggesting the MPC will "begin the pivot towards talking about rate cuts by removing the hawkish bias in its guidance that 'further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures'."
Deutsche Bank economists similarly foresee a "subtle but important shift" in the forward guidance, with the MPC officially ditching its current tightening bias but keeping its higher-for-longer message as it continues to strike a cautious tone around the trajectory of rates.
Like Barclays, Deutsche also expects a material shift in its inflation projections, with headline CPI reducing to the BoE's 2% target around 18 months earlier than previously forecast.
Barclays, Deutsche and UBS are all expecting a May rate cut, though there were suggestions that this could potentially slip to June if the MPC requires more evidence of a slowdown in pay growth and services inflation to start cutting.
Macro week ahead
Monday's economic announcements: Dallas Fed Manufacturing Index (US)
Tuesday's economic announcements: Nationwide House Price Index (UK), M4 Money Supply (UK), Mortgage Approvals (UK), BRC Shop Price Index (UK), House Price Index (US), Consumer Confidence (US), GDP (EU)
Wednesday's economic announcements: MBA Mortgage Applications (US), Employment Cost Index (US), Chicago PMI (US), Crude Oil Inventories (US)
Thursday's economic announcements: PMI Manufacturing (UK), BoE Interest Rate Decision (UK), Continuing Claims (US), Initial Jobless Claims (US), PMI Manufacturing (US), Construction Spending (US), ISM Manufacturing (US), ISM Prices Paid (US), Auto Sales (US)
Friday's economic announcements: Non-Farm Payrolls (US), Unemployment Rate (US), Factory Orders (US), University of Michigan Confidence (US)