The FOMC minutes among major catalysts of the week

On Monday, the dollar continued to rise on the prospect of interest rate hikes by the US Federal Reserve. The FOMC minutes and consumer spending data from major economies will be major catalysts for this week.

In the week ahead, market sentiment is expected to be dominated by concerns over tensions between Russia and Ukraine, as well as questions about how aggressively the Federal Reserve will raise interest rates. It will be interesting to see how quickly policymakers decide to move following Wednesday's Fed minutes. The U.S. data calendar for January includes producer prices, which are closely watched after consumer prices hit a 40-year high last week. 

A packed week on the U.K. economic calendar

There will be a string of economic data in the U.K. this week that could keep the Bank of England on track to raise rates again. Investors are waiting for the latest jobs figures out Tuesday, inflation data on Wednesday and retail sales on Friday.

A surge in inflation, which is forecast to peak at over 7%, has prompted the Bank of England to hike rates consecutively for the first time since 2004. Current market expectations call for another 130 basis points of rate increases before the end of the year.

The unemployment rate is likely to stay unchanged at 4.1% in the jobs report, while the annual inflation rate is expected to remain unchanged at 5.4%.

December's 3.7% drop in retail sales is expected to rebound in January, but rising energy prices, higher rates and tax hikes will all affect the outlook.

U.S. data in focus ahead of FOMC minutes

Tuesday's release of producer price inflation figures will provide an additional update on inflation. These numbers are expected to remain robust.

The rising cost of living has dampened consumer confidence, so Wednesday's retail sales figures will also be watched closely this week. Auto sales should have boosted retail sales by 1.8% last month versus the earlier 1.9% slide.

Similar results are expected in the core version of the report, which will see a 1.0% recovery after the 2.3% decline.

Watch out for the U.S. industrial production report due shortly after the U.S. retail sales report since it may show an uptick of 0.4% after the earlier drop of 1.0%.

Market participants also watch reports on jobless claims and housing market figures on the economic calendar.

FOMC meeting minutes

Investors await Fed's meeting minutes on Wednesday. The Fed offered almost no indication that a rate hike is imminent in its latest decision.

FOMC officials had been expected to signal an interest rate increase for March, but it seemed they were being cautious, nonetheless. This week's minutes may be outdated because they did not include the CPI surprise last week.