The Euro took a tumble in the early Monday trading sessions, as it was announced German Chancellor, Angela Merkel was struggling to form a new coalition Government, following the Free Democratic Party walking out from talks on Sunday. The talks broke down over a lack of ‘shared vision’. Merkel could still form a minority government with the Greens as the second largest party, whilst the Social Democrats have already ruled out a possible coalition with Merkel. Merkel is set to meet with President Frank-Walter Steinmeier, who has the power to call a snap election, to formally tell him the negotiations have failed.
Back in the UK, the UK Prime Minister Theresa May looks set to increase the amount being offered in the divorce bill, as the December deadline approaches. The divorce bill is one of the topics holding up the talk progression, along with citizen’s rights and Northern Ireland. The UK have until early December to convince the 27 EU countries they have done enough to progress the talks onto trade. May will meet with key ministers today to gain support for this increase in divorce offerings, taking the offer to 40 billion Euros from the original 20 billion.
Monday sees a quiet start to the week with no high tier economic data on the docket. ECB President, Mario Draghi, will be testifying before the European Parliament Economic and Monetary Affairs Committee on the economic and monetary policy, as well as the European Systemic Risk Board. Back in the UK, Bank of England Deputy Governor, David Ramsden, will speak at Kings College London, with audience questions expected.
On Tuesday, the UK Public Sector Net Borrowing figure will be released, expected to post 6.6 billion. The Inflation Report hearing is also set to take place with the BOE Governor and several MPC members testifying before the Parliament’s Treasury Committee on the inflation and economic outlook. Across the pond, Janet Yellen will be taking part in a panel discussion titled ‘In conversation with Mervyn King’ at the New York University Stern School of Business.
The UK Autumn Budget is set to be presented on Wednesday by the Chancellor of the Exchequer, Philip Hammond. Hammond looks set to unveil housing plans which will see 300,000 homes being built each year, compared to the current levels of about 200,000. The plans will also see stamp duty being reduced and an increased funding for the Help to Buy scheme. Across the pond, the US Weekly Unemployment Claims figure will be released alongside the Core Durable Goods order expected to post 241k and 0.4% retrospectively. The University of Michigan will release their revised version of the Consumer Sentiment report. The FOMC meeting minutes will also be released.
On Thursday, the US markets will be closed for Thanksgiving. The Eurozone will be releasing the Flash Manufacturing and Service PMI, expected to post 58.3 and 55.3. German and France will also be releasing their individual versions of the readings. Back in the UK, the second estimate of GDP is set to released, forecasted to post 0.4%. Canada will be releasing their Core Retail Sales figures, expected to post 0.9%.
Friday will see a quiet end to the week, with no high tier economic data being released. The Eurozone will release the German Ifo Business Climate Report, whilst across the pond, the US will post their Flash Manufacturing and Services PMI figures, expected to post 55.1 and 55.5.