LONDON Investors have a treat in store in the coming week when Federal Reserve Chairman Ben Bernanke 'does a Trichet' and holds a press conference for the first time following the bank's rate-setting meeting.
It will be the highlight of a week -- shortened by holidays in many places -- that also includes the first major auctions of U.S. Treasuries since rating agency Standard & Poor's fired a warning shot at Washington over the budget deficit.
The three events -- rate meeting, press conference and auctions -- all speak directly to one of the main issues hanging over financial markets, which have entered a period of almost daily swings into riskier assets and then out again:
When is the Fed going to pull the plug on the extraordinary loose monetary policy that has pumped up assets across the board?
Bernanke's press conference on Wednesday --- the first ever regularly scheduled briefing by a Fed chief in the U.S. central bank's 97-year history -- is an attempt by the Fed to communicate clearly what is on its mind.
"Everyone is going to be looking at it," said Marc Ostwald, strategist at Monument Securities.
European Central Bank President Jean-Claude Trichet has had success communicating his bank's views via a post-meeting press conference, with emphasis on so-called watchwords like "strong vigilance" being used to gauge sentiment.
Ostwald says investors will now be on alert for Bernanke watchwords such as "extended period," to judge how long loose monetary policy will run.
The issue is crucial for investors of all stripes. World equities, for example, hit a near 33-month high on Thursday based in no small part on the availability of cash engendered by the Fed and others.
The Bank of Japan, meanwhile, meets on Thursday with monetary policy and the damage from Japan's triple disasters still at issue.
Economists at the Organization for Economic Co-operation and Development cut Japan's growth forecast to 0.8 percent from 1.7 percent because of the earthquake, tsunami and nuclear crisis.
Investor focus is also likely to be on a series of U.S. T-note auctions -- two-year, five-year and seven-year on Tuesday, Wednesday and Thursday, respectively.
Such events usually go without a hitch and probably will again. But they do come following S&P's change of its outlook for U.S. government bonds to negative based on the country's massive debt and deficit.
While investors do not generally believe that S&P's move will have any tangible effect, it has reminded them of the argument that Washington's fiscal path is unsustainable.
PIMCO, the world's largest bond fund, is already eschewing U.S. government debt, while leading investor Jim Rogers says Treasuries are a bubble.
"At some point along the line, people are going to realize it's absurd to lend money to the United States government for 30 years in U.S. dollars at 3 or 4 or 5 or 6 percent interest," he told Reuters Insider. "The market is just going to give up."
He said the trigger could be when the Fed ends its asset-buying quantitative easing program, scheduled for June.
That said, a lot of the demand for shorter-term U.S. debt such as that being auctioned in the next week does not come from the mainstream investment community, but from governments and government entities.
Monument Securities reckons only 28 percent of shorter-term U.S. government debt is in free float, meaning that its low yields may be more a reflection of lack of supply than any endorsement of U.S. economic sustainability.
If this is the case, good auctions would not necessarily imply broad investor approval of the U.S. fiscal performance.
The coming week will also bring more reports in what has generally been a good corporate earnings season.
Of the 100 S&P 500 .SPX companies that have reported first-quarter earnings so far, 78 percent have either beaten or met market expectations, data from Thomson Reuters StarMine shows.
In Europe, which started later, only 25 companies among the those reporting for Q1 in the STOXX 600 have been heard from. But 60 percent of them are above forecast.
Graphic on U.S. earnings revisions r.reuters.com/tuc29r
The week ahead brings the likes of Boeing (BA.N), eBay (EBAY.O), Caterpillar (CAT.N), Microsoft (MSFT.O) and Dow Chemical (DOW.N)
With no sign of the euro zone debt crisis abating, European earnings include some of the region's biggest banks, notably Barclays (BARC.L), Santander (SAN.MC), Deutsche Bank DBKGn.DE>, UBS UBSN.VX and Creit Suisse CSGN.VX.
(Additional reporting by Dominic Lau; Editing by Catherine Evans)