Global Reach is becoming Corpay Cross Border, part of FLEETCOR, to broaden our client offering. Please contact our team or visit to find out more.

Pivotal week for European Central Bank and UK Government lies ahead


Earlier in the year, the Office for National Statistics (ONS) implemented a new way of reporting UK Gross Domestic Product (GDP), in a bid to improve the accuracy of the early stage readings. The week will kick-off with the October UK GDP print, a reading which after a strong start through the early summer, came in flat for both August and September. Expectations are that a 0.2% uptick will be seen for the month, although concerns linger that this will be as good as it gets for the remainder of the year. The last report flagged up how the services sector was acting as a drag on economic growth and with the Services Purchasing Managers’ Index (PMI) having disappointed last week, there’s little reason to believe that any significant improvement will be seen. Brexit uncertainty clearly continues to take a toll on the health of the UK economy.

A European Court of Justice ruling is also expected today as to whether the UK can revoke Article 50 and walk away from the Brexit process. Regardless of what happens next, the mere confirmation that this is possible would likely deliver upside for Sterling.


The UK Parliament is set to vote on the Brexit bill following five days of debate. This process has left the British Prime Minister very much on the back foot, and it seems unlikely that the bill will be passed. There are plenty of questions over what happens next, but in short, the uncertainty is unlikely to do any favours for the Pound, at least in the near-term.

The forward-looking German ZEW Economic Sentiment indicator for December is scheduled for publication on Tuesday too. The ecostat is forecast to come in at -25, worse than the -24.1 recorded in November, making for the worst print in over five years; the reading hasn’t been positive since March. With the European Central Bank (ECB) adamant that it needs to accelerate the tightening of its monetary policy, beginning with the expected announcement later this week that bond-buying will be terminated, a slump over the outlook could prove a cause for concern.


Core US Consumer Price Inflation (CPI) for November is expected to come in at 2.2% year-on-year, up from the 2.1% recorded a month ago. Rising inflation doesn’t play to the Federal Reserve’s ambitions to ease off on its pace of interest rate hikes, although the broader overall CPI figure may prove more encouraging with falling fuel prices expected to help ease this print down from 2.5% to 2.4%. Ultimately, US inflation has been running at over 2.0% for more than a year, meaning the Federal Reserve needs to tread a cautious path as taking a softer line over monetary policy too soon could see this reading spike higher in the medium-term.

The US monthly Federal Budget balance is also set for publication. This has the potential to highlight the impact of Donald Trump’s generous spending, something that was supposed to be recouped through increased tax receipts at a later date. However, with the US economy showing some signs of slowing, questions are being asked as to whether this will play out as intended.

Federal Reserve Chief Jerome Powell’s rescheduled appearance in front of the Joint Economic Congress is scheduled for today, having been held over from last week following the national day of mourning after the death of former President Bush. This could provide further insight as to the timing of any break in US monetary policy, and it should be reiterated that the chance of a fourth rate hike before Christmas still only stands at around 80%.


The European Central Bank will hold its final monetary policy meeting of the year on Thursday. Interest rates are widely expected to be left unchanged, but the big question hangs over ending the bond-buying stimulus. Despite a slowing underlying economy, the ECB is expected to stick to the plan, although reports suggest there will be some kind of compromise deployed in the New Year to help wean the Eurozone off almost a decade of cheap money. This is mooted to include multi-year loans, and when interest rates do start to rise, only the most gradual of increases are expected. The subsequent press conference will be closely followed, and any deviation from the well-telegraphed intentions would have the potential to weigh on the Euro.


US Advance Retail Sales for November will round out the week. The broadest reading is set to fall from 0.8% to 0.2%, although the core retail sales figure excluding autos, has been forecast to post a less dramatic decline from 0.7% to 0.4%. This metric has only produced a negative print once in the last twelve months, but anything close to zero would again raise concerns over the outlook for the US economy. Record Black Friday online sales may have been recorded, but with the scale of discounting having been noted as ‘remarkable’, a short burst of activity like this clearly shouldn’t be seen as representative of wider market conditions.