GLOBAL ECONOMY WEEKAHEAD-Charting a path to "normalisation"

Sun Jul 13, 2014 5:00am EDT
 
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* Yellen speech to Congress to gives clues to rate hike timing

* Bank of Canada seen on hold at 1 pct by economists

* China to show 7.4 pct GDP growth for 2nd qtr, tweak policy

* Contagion from Portugal another worry for ECB's Draghi

By Robin Emmott

BRUSSELS, July 13 (Reuters) - Investors shift focus this coming week from trouble spots such as Portugal's biggest listed bank to a marathon testimony by the U.S. Fed chair that could help chart a global path towards post-crisis "normalisation".

Concerns about losses associated with the founding family of Banco Espirito Santo had threatened to rattle euro zone markets, but by Friday traders had decided that BES was unlikely to disrupt Portugal's financial system or revive broader worries about the bloc's weaker economies.

In any case, Janet Yellen's two-day appearance in the U.S. Congress from Tuesday will dominate global markets, which want above all to know how long the Federal Reserve will leave interest rates low after an unprecedented period of cheap money since the financial crisis.

While October is likely to mark the end of the central bank's money printing, investors are looking for hints of an interest rate hike early next year, which would signal a return to normality after the Great Recession and its aftermath.   Continued...