May set for another difficult week
UK Prime Minister, Theresa May looks set to have another difficult week as Conservatives are expected to vote for amendments made by the pro-Brexit Tory, Jacob Rees-Mogg, to the Taxation (cross-border trade) bill which returns to the House of Commons today. Although it is not expected that the amendments will pass through the Commons, the move will show May the strength of the Euroskeptics. The move comes as May lost four important members of her party last week. The first to resign was Brexit Secretary David Davis, who was followed by Foreign Secretary Boris Johnson. Vice-Chairs, Maria Caulfield and Ben Bradley were the next to resign from their posts. They cited the latest Chequers Brexit plan as the reason behind their decision.
Today will be a quieter start to the week, with only high tier data releases being from the US featuring on the economic docket. The retail sales figure for June will be released. The reading as expected declined to 0.4% after rising to revised figure of 1.4% in the previous reading. Also from the US, the empire state manufacturing index dropped to 22.6 from 25.0 last month, however the reading was better than the markets originally expected.
Tuesday will start with the Bank of England Governor, Mark Carney and Deputy Governor, Jon Cunliffe testifying before the Treasury Select Committee on the Financial Stability Report. UK Labour data is scheduled to be released. Both the Average Earning Index and Unemployment Rate are expected to remain static at 2.5% and 4.2% retrospectively. However, the claimant count change for June is forecast to drop to 2.3k from -7.7k. Across the pond, the Federal Reserve Chair, Jerome Powell will be testifying before the Senate Banking Committee on the Semi-Annual Monetary Policy Report. The manufacturing, mines and utilities sectors which be releasing the Capacity Utilization rate and Industrial Production figures, both expected to uptick from the previous readings to post 78.4% and 0.5% retrospectively.
On Wednesday, the UK will be releasing the latest CPI reading. The figure is expected to creep back up to 2.6% after posting 2.4% for two consecutive months. The forecast rise is expected to be attributed to the rise of oil prices and household energy bills. In the Eurozone, the final CPI figure is expected to remain at 2%. Across the pond, Federal Reserve Chair, Jerome Powell begins his second testimony on the Semi-Annual Monetary Policy report, this time before the House Financial Services Committee. The Building Permits reading is expected to see a small uptick to 1.33m.
The UK will release the latest Retail Sales figure, expected to drop down from 1.3% previously to 0.2% for June. Across the pond, Federal Reserve Governor and voting member, Randal Quarles will be delivering the opening remarks at the Alternative Reference Rate Committee Roundtable. The US will also be releasing the Philly Fed Manufacturing Index, which is expected to uptick to 20.6 from 19.9.
There is a quieter end to the week for the UK, Eurozone and US markets, with no high tier data readings on the docket. Canada will be releasing their CPI reading for June, as well as the Core Retail Sales figure. Friday will also be day one of the G20 meeting, which is attended by finance ministers and central bankers from 20 nations, including the US, UK, China and parts of the Eurozone.