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Guidelines for Brexit negotiations agreed

The US released their latest Core Durable Goods Orders figure on Friday. The reading beat market expectations to post 1.2%, compared to a decline of -0.2% in the last reading. This increase is consistent with the growth seen in the Manufacturing figures seen last month. Despite the bullish data, the Dollar declined against its major counter parties as the markets continued to focus on the trade war between the US and China. It is thought the decline is the aftermath of Trumps announcement; that China may face tariffs up to $60bn on Chinese goods. In response to Trump, China announced reciprocal tariffs of around $3bn on US imports.

At the EU Summit last week, EU leaders approved the guidelines for the negotiations between the EU and UK. This key step allows the EU and UK to begin discussing their future relationship during the transition period and beyond, especially after the UK leaves the bloc in 2019. The next summit in June will focus on resolving the Northern Ireland border issue.


There is a quiet start to the week today as there is no high tier data on the economic docket. The President of Deutsche Bundesbank, Jens Wiedmann will be delivering a speech at the Central Bank of Austria, titled ‘New Momentum for Europe.’ Across the pond, three FOMC members will be speaking. The first is William Dudley, who will be taking part in a panel discussion on regulatory reform. The next is Loretta Mester, who will be talking at Princeton University on the Economic Outlook and Monetary Policy. The last speaker of the day will be Randal Quarles, who will be delivering a speech titled ‘The roles of consumer protection and small business access to credit in financial inclusions.’


Tuesday will begin with the release of the Flash CPI figure from Spain, which is expected to uptick from 1.1% to 1.5%. In the US, the CB Consumer Confidence report is scheduled to be released. It is expected that the Confidence Index figure will increase from 130.8 which was reported last month, to 131.2. The day will end with FOMC member, Raphael Bostic speaking at the Hope Global Forums Annual Meeting.


Focus will remain with the US on Wednesday, with the release of the final GDP figure for Q4 of 2017. The figure is forecast to post 2.7%, 0.2% higher than the previous reading. The US will also be releasing the Pending Home Sales figure which looks at the number of homes which are currently under a contract to be sold, but are awaiting the final closing transaction. The figure for February is expected to bounce up from last month’s bearish 4.7% to 2.1%. The day will end with FOMC member, Raphael Bostic speaking at the Atlanta Society of Finance and Investment Professionals luncheon.


The Eurozone will be releasing the Prelim CPI figure from their biggest economy on Thursday. The month on month reading of this figure is expected to remain static at 0.5%. Back in the UK, the Current Account figure for Q4 of 2017 will be released. The Current Account figure looks at the difference between imported and exported goods, services, income flows and unilateral transfers between one quarter and the next. This release is expected to decline to -23.7b. The final GDP figure for the UK is also scheduled to be released at 0.4%.


Friday will be a quieter day for the markets as the UK, Canada and some Eurozone markets will be closed in observance of Good Friday. France and Italy’s Prelim month on month CPIs will still be released, expected to post 0.8% and 0.1% retrospectively.