GLOBAL ECONOMY WEEKAHEAD-U.S. retail sales and Yellen testimony in focus
(Adds China foreign reserves data)
By Jonathan Cable
LONDON Feb 7 (Reuters) - Global markets have been in turmoil since the start of the year, with stocks and commodities prices reeling, eroding inflation and making central banks increasingly dovish - a trend that could continue with more weak economic data.
China, a focus of much of the recent market concern, released foreign reserves data on Sunday which showed the central bank dumped dollars to defend the yuan and prevent an increase in capital outflows.
The country's foreign reserves fell $99.5 billion to $3.23 trillion in January, the lowest level since May 2012, central bank data showed.
U.S. retail sales figures will meanwhile give clues to the state of consumer confidence in the world's largest economy, as will U.S. Federal Reserve Chair Janet Yellen's testimony to the House Financial Services Committee on Wednesday.
Oil prices have tumbled 70 percent since mid-2014, driving down inflation and adding to expectations that central banks will be forced to maintain or even ease further their already ultra-loose monetary policies.
Late last month the Bank of Japan unexpectedly took the plunge into negative interest rates, following in the wake of the European Central Bank, which will more than likely shave another 10 basis points off its own sub-zero deposit rate in March.
For its part, the U.S. Fed is looking increasingly unsure about when it will next raise rates, while economists in Reuters polls have pushed back expectations for the first Bank of England hike by six months in the space of three weeks. Continued...