UK Prime Minister, Theresa May, announced she will be hoping to form a government with help from the Democratic Unionists, Friday afternoon, after failing to gain a majority in the House of Commons. She announced the decision in a statement outside Downing Street, after visiting Buckingham Palace. In the snap election, the Conservatives lost their majority, reducing their seats from 331 to 318. To reach a majority and be able to pass laws through Parliament, they must have over 326 seats. Combining with DUP will push them over this number. The conversations with DUP are to take place at the beginning of this week. Theresa May will also face the 1922 committee today, who are expected to question her leadership style and press for further details on the talks with DUP.
Across the pond, the drama between ex FBI Director James Comey and President Donald Trump continues, as both Trump and Attorney General Jeff Sessions are willing to testify in the case. Trump called Comey ‘very cowardly’ in a tweet posted Sunday. In a news conference on Friday, Trump went on to say how the testimony had shown he hadn’t colluded with the Russian government to rig the 2016 election and how he hadn’t obstructed the investigation. Jeff Sessions is set to appear in front of the Senate Intelligence Committee on Tuesday. It is unknown if this will take place in an open or closed format yet.
Economical data releases are light today with only the US Federal Budget Balance being released. However, the focus will continue to be on the forming of the new Government in the UK.
The UK inflation rate will be released Tuesday along with the retail price index. Both are expected to remain sticky at 2.7% and 3.5% retrospectively. From the US, the PPI figure will be released, expected to drop half a percent to flat.
Wednesday is the biggest day of the week in the US, with the release of the CPI, retail sales and the interest rate decision. It is expected the Fed will announce a rate hike taking the interest rate to 1.25%. The Fed will also release their economic projections and statement.
On Thursday, the focus switches to the UK and the interest rate decision. The interest rate is not expected to increase. However, the votes could be a market mover if another member joins Kristin Forbes and vote for a rate rise.
Friday will be a quiet end to the week with little economic date being released. The week will end with the FOMC member, Robert Kaplan, speaking at the Rotary Club of Park Cities in Dallas. Audience questions are expected.