Janet Yellen starts her first week as US Federal Reserve chairman, succeeding Ben Bernanke, as she is sworn into office today at a time when the domestic economy looks in decent shape but China's is showing signs of crumbling.
The latest US employment data due in the coming days will provide further clues as to whether policy makers, now under Yellen's stewardship whose appointment began on February 1, will feel compelled to continue cutting their stimulus in US$10 billion increments per FOMC meeting, as is expected.
The Fed last week said it would cut its monthly bond purchases by another US$10 billion, as had been widely anticipated, and following a similar cut announced at its December meeting. The latest downgrade reduced the program to US$65 billion.
The ADP employment report is due on Wednesday, followed by weekly jobless claims on Thursday, and the all-important non-farm payrolls report for January on Friday. The latter is expected to show the unemployment rate held steady at a five-year low of 6.7 per cent as companies added more than double the measly 74,000 jobs they did in December.
Wall Street posted a loss for the first month of 2013. In January the Dow Jones Industrial Average shed 5.3 per cent, while the Standard & Poor's 500 Index dropped 3.6 per cent, and the Nasdaq Composite Index slid 1.7 per cent.