As we step into the first full week of February, global markets brace for crucial economic data and central bank decisions. From inflation updates in the Eurozone to key employment figures in the U.S., this week is packed with market-moving events. Here’s a breakdown of what to expect.

Monday: Euro Area Inflation in Focus

The European Central Bank (ECB) is facing a complex scenario as inflation data for the Eurozone is set to be released. Despite expectations that annual consumer price growth will hover around December’s 2.4% mark, analysts are forecasting a slight rise to 2.5% for January. This would mark the fourth consecutive increase, yet the ECB remains committed to rate cuts. Market participants are closely watching how policymakers will navigate inflation concerns ahead of their March meeting.

Tuesday: U.S. Factory Orders Continue to Slide

The latest data on U.S. factory orders is expected to confirm ongoing weakness in the manufacturing sector. Forecasts suggest a 1.0% month-over-month decline, marking the fourth drop in five months. This follows a modest 0.4% decrease in November and signals ongoing struggles for the industrial sector. While durable goods orders have held up slightly better, core capital goods remain under pressure. Analysts are looking for signs of a turnaround, but investment activity remains uncertain.

Thursday: Bank of England Rate Decision

The Bank of England (BoE) is widely expected to lower interest rates by 25 basis points to 4.50%. This move would align with previous cuts seen in August and November. Economic challenges in the UK, including weak growth and rising unemployment, have heightened expectations for a dovish stance. New growth forecasts will also be released, and analysts anticipate a downward revision for near-term prospects. Inflation expectations, however, could see an upward adjustment, adding another layer of complexity to the BoE’s policy path.

Friday: U.S. Non-Farm Payrolls Take Center Stage

The highly anticipated U.S. jobs report will provide crucial insights into the strength of the labor market. Economists predict a net gain of 170,000 jobs in January, following a strong December increase of 256,000. However, potential revisions to previous reports could introduce additional uncertainty. Some forecasts suggest that recent survey adjustments may significantly alter December’s employment figures, adding volatility to market reactions. A stronger-than-expected report could challenge expectations of Federal Reserve rate cuts in the coming months.

This week’s economic data and central bank decisions will play a critical role in shaping market sentiment. Inflation trends in Europe, manufacturing activity in the U.S., and job market strength will provide important signals for policymakers and investors alike. Stay tuned as these developments unfold and drive key market movements.