May stressed she would like to see the UK and EU continuing to work closely together on security, despite Brexit. Security wasn’t the only area of May’s vision which became clearer over the weekend. Theresa May is still set on picking and choosing the rules she would like the UK to follow. For example, it is expected she will choose to drop rules in the financial services and agriculture area, but favour keeping rules where it would make regulatory sense, such as in manufacturing. Despite the EU previously warning the UK they couldn’t ‘cherry pick’ the rules, German Chancellor, Angela Merkel indicated, after meeting with May on Friday, that making a tailored deal for the UK wouldn’t necessarily be ‘cherry picking.’
There is a quiet start to the week today, with no high tier data on the economic docket. The US markets are closed in observance of President’s Day. Bank of England Governor, Mark Carney will be speaking about leadership and values at the Regent’s University in London.
Tuesday will start with the release of the Monetary Policy Meeting minutes from the Reserve Bank of Australia’s latest meeting. The markets are not expecting the minutes to be different from the latest communications from the RBA, but are expected to remain relatively upbeat on growth. The Eurozone will be releasing the German ZEW Economic Sentiment, which is expected to post 16.5.
The Eurozone will be releasing their Flash Manufacturing and Services PMIs on Wednesday, expected to post 59.4 and 57.7 retrospectively. Two of the largest economics from inside the Eurozone will also be releasing their individual versions of the figures. The German Flash Manufacturing PMI is expected to post 60.7 whilst the Services PMI is forecast at 57.2. The French Flash Manufacturing PMI is expected at 58.2, and Services is forecast to post 59.1. Back in the UK, the UK Average Earnings Index will be released expected to remain stable at 2.5%. The Claimant Count Change is expected to drop from 8.6K in the previous reading to 2.3K for January. The Unemployment Rate is expected to remain static at 4.3%. The Labour Data figures will be closely watched by the markets for further evidence that the BOE will be in a position to raise rates again quicker than previously thought. BOE Governor, Mark Carney will also be testifying before the Parliament’s Treasury Committee on the inflation and economic outlook. Across the pond, the US will be releasing the Existing Home Sales figure, along with the latest FOMC meeting minutes. The minutes will be closely analysed by the markets to see whether the tone of the Federal Reserve meeting was as hawkish as the markets believed.
Thursday will start with the release of the German Ifo Business Climate report, which is expected to post 117.6. The European Central Bank will be releasing the Monetary Policy meeting accounts from their latest meeting. It is unlikely that the minutes will reveal much, as the ECB left their policy unchanged in the latest meeting. However, the markets will be looking at whether the ECB are focusing on the strong economic growth or the low inflations levels. Back in the UK, the second estimate GDP will be released expected to post 0.5%. Across the pond, the first set of the FOMC members are scheduled to speak. Randal Quarles will be delivering a speech at the International Financial Symposium in Tokyo entitled ‘10 years after the Global Financial Crisis: How has the world economy changed and where will it go?’ FOMC member Raphael Bostic will be speaking at the Banking Outlook Conference, hosted by the Federal Reserve Bank of Atlanta.
The Eurozone’s final CPI will be released on Friday, expected to remain stable at 1.3%. Canada will also be releasing their CPI figure, which is expected to post 1.5%. In the UK, BOE Deputy Governor, David Ramsden will be taking part in a panel discuss at the East of England Confederation of British Industry event, on ‘Tackling the UK’s Productivity Challenge.’ Back across the pond, the next set of FOMC speeches will be taking place. Both William Dudley and Loretta Mester will be taking part in panel discussions at the United States Monetary Policy Forum. Dudley will be discussing the Fed’s balance sheet, whilst Mester will be talking about the objectives of monetary policy. Federal Reserve Bank of San Francisco President, John Williams, will round up the week speaking at the City Club of Los Angeles on the economic and monetary policy outlook.